Sensex gains 339 points

The 30-share sensex surged by 339 points to close at its highest level in two-and-half years. While the mood was upbeat due to strong performances of stock markets globally, the Indian government’s decision not to tax long-term capital gains in the new Direct Tax Bill also boosted sentiments. The Indian market on Monday opened higher as the better-than-expected employment data for August from the US eased fears of a double-dip recession, leading to a rally in most of the global markets. On the Bombay Stock Exchange (BSE), the metal stocks index rose sharply by around 3.5%, while banking stocks index improved by over 2%. The sensex closed 1.9% higher at 18,560 points, its best close since February 5, 2008, when it touched 18,663 points. The National Stock Exchange’s 50-share nifty rose 1.8% to close at 5,577. The government’s decision to lower the short-term capital gains tax was also seen as a positive development by the market players. With economic growth rate expected to remain strong, analysts feel that the upward movement in the sensex will continue.

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