Sensex rises 400 points: Hopes of relief for FPIs & other factors fuelling the rally

NEW DELHI: Hopes of a comprehensive relief package for the capital market has given a fresh lease of life to benchmark indices, which on Friday rallied for the second straight session. Global concerns too have eased a bit following the release of upbeat US jobs data.

At 12.15 pm, the BSE benchmark was ruling 420.35 points, or 1.13 per cent, higher at 37,748. Nifty50 was trading at 11,168.10, 135.65 points or 1.23 per cent.

Here are the top factors that lifted the market higher on Friday:


FM officials to meet FPIs today: Finance ministry officials led by Economic Affairs secretary Atanu Chakraborty will meet FPIs today, as the government seeks to restrict foreign outflows. Sources told ET that FPIs may seek removal of tax surcharge introduced in the Budget. They may raise issues such as restricted access to corporate bond markets and tighter Know Your Client (KYC) norms. On Thursday, ET NOW reported that the the Finance Ministry is working on a package for capital markets, which may include withdrawal or some tweaking of the long-term capital gains tax (LTCG).

FM promises to consider India Inc suggestions: Earlier today Finance Minister Nirmala Sitharaman held a National Council Meeting with members of Confederation of Indian Industry (CII). Following the meeting, CII president Uday Kotak said that the FM has promised fair and patient hearing to views of FPIs in broader context of capital markets and economy. He suggested that Sitharaman heard views on different sectors of the economy with an open mind. She assured that she will consider the suggestions made, Kotak said.

"Some confidence boosting measures and steroids for the economy is expected as finance ministry seems to be engaging in extensive discussions with industry participants. However, it is too early to speculate on policy decisions,” said Devang Mehta of Centrum Wealth Management.

US data allays recession concerns: US data pointed to a robust labor market as the number of Americans filing applications for unemployment benefits unexpectedly fell last week, allaying some worries about a recession and helping US Treasury yields rise, Reuters reported. Initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 209,000 for the week ended August 3.

Rupee appreciation: A recent fall in oil prices and reports of the FPI meeting later in the day pushed rupee higher by 20 paise to 70.49 against the dollar on Friday. This is in addition to the 20 paise gain the domestic currency saw on Thursday. An appreciation in rupee value increases return on FPI investment.