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Sensex pares early gains, ends modestly higher

MUMBAI: Equity benchmark sensex pared early gains but managed to end 84 points higher on Monday following the finance minister’s announcements to revive festive demand in the economy.
After rallying nearly 400 points in morning trade, the 30-share BSE index pared most gains to end 84.31 points or 0.21 per cent higher at 40,593.80.
Similarly, the NSE Nifty rose 16.75 points or 0.14 per cent to close at 11,930.95.
ITC was the top gainer in the sensex pack, spurting over 2 per cent, followed by Infosys, Asian Paints, HCL Tech, Maruti, PowerGrid, ICICI Bank and TCS.
On the other hand, Bharti Airtel, ONGC, HDFC Bank, IndusInd Bank and Bajaj Auto were among the laggards.
Traders said benchmark indices traded with a positive bias through the day, but market participants turned cautious after Finance Minister Nirmala Sitharaman’s press conference to announce the stimulus measures.
In a bid to stimulate consumer demand during the festival season and boost the economy, Sitharaman on Monday announced a payment of cash in lieu of LTC and Rs 10,000 festival advance to government employees.
She also announced additional capital spending and Rs 12,000 crore, 50-year interest-free loan to states to boost the economy that has been battered by the pandemic and the resulting lockdowns.
According to Arjun Yash Mahajan, Head Institutional Business at Reliance Securities, the government’s effort to stimulate consumers demand by offering advances and cash voucher schemes looks to be short-term in nature and lacks commitment to have a sustainable growth.
“This may lead to a kind of destocking led demand improvement ahead of festivals or fiscal end. However, it may not necessarily result in a sustainable recovery. This may not entice the market,” he said.
Meanwhile, on the global front, bourses in Shanghai, Hong Kong and Seoul ended on a positive note, while Tokyo was in the red.
Stock exchanges in Europe were largely trading with gains in early deals.
International oil benchmark Brent crude was trading 1.38 per cent lower at $42.26 per barrel.
In the forex market, the rupee snapped its three-session winning run, slipping 12 paise to close at 73.28 against the US dollar.

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