Sensex climbs over 700 points after govt takes steps to boost economy

Mumbai: Domestic equity benchmark BSE Sensex rallied over 700 points in afternoon session on Monday after the government rolled back the enhanced surcharge on foreign portfolio investors, and unveiled a slew of measures to boost the economy.

The 30-share index, however, pared some gains as investors began booking profits at higher levels. The index was trading 755.67 points, or 2.06 per cent, up at 37,456.83. Similarly, the broader Nifty too surged over 200 points to briefly reclaim the 11,000 mark, but gave up some gains to trade 217.90 points, or 2.01 per cent, higher 11,047.30.

Top gainers in the Sensex pack included SBI, M&M, HDFC twins, Yes Bank, ICICI Bank, Bajaj Finance, L&T, ITC and Axis Bank, rallying up to 3 per cent.

On the other hand, Vedanta, Tata Steel, IndusInd Bank, Sun Pharma, HCL Tech and Hero MotoCorp fell up to 4 per cent.

Giving in to the demands of overseas investors, Finance Minister Nirmala Sitharaman on Friday, after market hours, announced rollback of enhanced surcharge on foreign portfolio investors (FPIs)levied in the Budget.

The Budget proposal to hike surcharge on FPIs had spooked foreign investors, who withdrew more than USD 3.4 billion (Rs 24,500 crore) from domestic equities in July and August. The massive capital outflows also put pressure on the rupee, which slumped to 72-level against the US dollar last week.

Foreign portfolio investors sold shares worth a net of Rs 1,737.20 crore on Friday, while domestic institutional investors purchased shares worth Rs 1,548.49 crore, provisional data showed.

The rupee, meanwhile, depreciated 33 paise against its previous close to trade at 71.99 in early session.

"The Finance Minister has announced a slew of measures that will go a long way in addressing the expectations of investors and equally importantly, improving consumer confidence," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.

In large part, financial markets sold off on a disappointing budget. Investors will draw comfort from the measures announced today and the process for growth recovery has started, he added.

Elsewhere in Asia, bourses tanked after Donald Trump fuelled the trade war with China by imposing more tariffs on the nation's imports.

Exchanges in Hong Kong, Korea, Shanghai and Japan were trading on a significantly lower in their respective late morning sessions.

Global oil benchmark Brent crude was trading 0.99 per cent lower at 58.22 per barrel.