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Sensex and Nifty rise on trade optimism, hopes of more stimulus

Brokers trade at their computer terminals at a stock brokerage firm. Photograph:( Reuters )

Reuters New Delhi, India Aug 27, 2019, 10.26 AM (IST)

Indian shares rose for a third straight session on Tuesday, as sentiment was boosted by easing global trade war worries and expectations of additional stimulus supported by a huge dividend from the Reserve Bank of India.

The broader NSE Nifty was up 0.49% at 11,110.20 as of 0409 GMT, while the benchmark BSE Sensex was 0.38% higher at 37,625.

The government is set to receive a much higher-than-expected dividend of 1.76 trillion rupees ($24.62 billion) from the central bank, allowing the administration to provide a wobbling economy additional fiscal stimulus.

"Markets may now consolidate and choose to look at what the government will do with the money," said Saurabh Jain, assistant vice-president of research at SMC Global Securities in New Delhi.

"It is essential to see where this money will go and which pockets will benefit, given the state of the economy."

Markets have gained on the back of the government's move to roll back a recently announced tax surcharge on foreign and domestic equity investors, speed up capital infusion to state-run banks and support the beleaguered domestic auto industry.

The India volatility index plummeted as much as 13.42% on Tuesday.

Broader Asian shares tracked global stocks higher as signs of easing hostilities between the United States and China restored investor confidence.

The Nifty PSU bank index, tracking state-owned banks, gained as much as 2.13%, with State Bank of India rising about 2.3%.

Tata Motors Ltd was the top gainer among the Nifty stocks, rising as much as 2.89%, while Tata Steel Ltd gained as much as 3.76%.

Among the few losers on the NSE Nifty were IT stocks, weighed down by a decline in the rupee to 71.83 rupees per dollar vs last close of 72.03 rupees.

Tata Consultancy Ltd and Infosys Ltd fell as much as 1.24% and 1.76%, respectively.

Story highlights

The broader NSE Nifty was up 0.49% at 11,110.20 as of 0409 GMT, while the benchmark BSE Sensex was 0.38% higher at 37,625.