Indian share markets continued their momentum throughout the day and ended the day on a strong note. Gains were largely seen in the realty sector, telecom sector and auto sector.
At the closing bell, the BSE Sensex stood higher by 629 points (up 1.8%) and the NSE Nifty closed higher by 188 points (up 1.8%). Both, the BSE Mid Cap index and the BSE Small Cap index, ended the day up by 2.5%.
Asian stock markets finished on a positive note as of the most recent closing prices. The Hang Seng stood up by 1.6% and the Nikkei was trading up by 2.2%. The Shanghai Composite stood higher by 0.3%.
European markets were trading on a positive note. The FTSE 100 was up by 1.1%. The DAX was up by 1.1% while the CAC 40 was up by 1.8%.
The rupee was trading at 71.93 to the US$ at the time of writing.
Rising for the second straight session, the benchmark BSE Sensex gained over 300 points in early trade today after Shaktikanta Das was named as the new governor of the RBI.
Reportedly, former economic affairs secretary Shaktikanta Das had been instrumental in establishing the monetary policy committee (MPC) and the switchover to an inflation targeting regime, among other things. Now that he's moving to the regulatory side, Das may even have to resist some of the ideas he supported when in government.
Das was named the 25th governor of the Reserve Bank of India to succeed Urjit Patel. As we all know, Urjit Patel quit abruptly on Monday amid a bitter dispute over the regulator's autonomy.
The above development came on the back of Reserve Bank of India (RBI) governor Urjit Patel's resignation on Monday.
Patel, whose three-year term was to end in September 2019, is the first governor since 1990 to step down before his term ended.
Patel cited personal reasons for his resignation, but as per the reports, there were undercurrent since the government cited hereto never-used-before provisions of the law to bring him to negotiating table on issues it felt were of national interest.
Speaking of a tiff between the government and the RBI, here's an excerpt of what Vivek Kaul, the editor of Vivek Kaul Publishing wrote in his article titled RBI-FinMin Bhai Bhai is Always a Bad Idea:
So, the big question here is, does the RBI woes end with new leader?
As per an article in The Economic Times, India can burn through as many central bankers as it wishes, but unless politicians let the Reserve Bank of India do its job, the economic setup will fall short of the nation's aspirations.
The article compares RBI with China's Central Bank. Here's an excerpt from the article:
How this pans out for the Indian economy remains to be seen.
In the news from the banking space, State Bank of India (SBI) share price was in focus today as the lender said its board has given approval to raise US$ 1.25 billion through a public offer or private placement of senior unsecured notes.
Punjab National Bank share price was also in focus today as it was able to raise around Rs 5 billion after its Employee Stock Purchase Scheme (ESPS) was 90% subscribed.
In other news from the macroeconomic space, the Congress was able to make significant gain in this round of assembly elections. This came it won in three states - Chhattisgarh, Rajasthan, and Madhya Pradesh. It, however, lost to the Mizo National Front (MNF) in Mizoram.
Speaking of elections, are we heading for a volatile election year?
If history is anything to go by, it's time to fasten the seat belt.
Every year before the Indian General Election, the stock market has bordered on the extreme. Two of these elections have also coincided with one of the biggest stock market corrections in recent history.
Why this volatility though? Why should elections matter to the stock markets?
Investors, both domestic and foreign, expect stability at the central government level. A stable government will be in a position to implement a clear roadmap for the future.
On the other hand, a divided mandate could mean policy paralysis and roadblocks. Markets speculate on these factors.
Also, certain sops are announced before the elections to appease the masses. That too has an indirect effect on listed companies.
Should investors be mindful of these factors? Does this one-year volatility even matter for long-term investors?
As per Research Analyst, Girish Shetty, it ideally shouldn't but the year can certainly throw up a lot of opportunities if there is an irrational reaction to high-quality safe stocks.
With the state and general elections ahead, market participants expect the stock markets to remain volatile. In our latest episode of Indian Stock Market Podcast, Rahul Shah talks about his mantra to ride out the volatility in times like these. Listen in... visit SoundCloud, iTunes or Stitcher.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!
Read the latest Market Commentary
Equitymaster requests your view! Post a comment on "Sensex Ends 629 Points Higher; Realty and Auto Stocks Witness Buying". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!