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Posted at: Jun 20, 2017, 12:15 AM; last updated: Jun 20, 2017, 12:15 AM (IST)

Markets hit new peak on GST progress

Tribune News Service

New Delhi, June 19

The BSE Sensex jumped by 255 points to close at a new peak of 31,312 points today and the NSE Nifty reclaimed the key 9,600-mark after the progress achieved on GST implementation and hopes of NPAs in the banking sector getting resolved.

The Sensex hit a high of 31,362 points before closing at a new record high of 31,312 points up by 255.17 points, breaking its previous record closing of 31,309.49 on June 5.

Vinod Nair, Head of Research, Geojit Financial Services, said the market is back to the buoyed sentiment due to relaxation in return filing timeline to minimise the impact of transition to GST. On the other hand, RBI’s insistence that the banks start the bankruptcy proceedings which will improve bank’s asset quality and strengthen the balance sheet, led the index to climb by 1%.

VK Sharma, Head Private Client Group at HDFC Securities, said, another factor that will play a role in forming investment sentiment will be the progress of the monsoon. While the markets have begun well, the absence of any weather systems in the Bay of Bengal and the Arabian Sea may be a concern going forward, he added.

Radhika Rao, India Economist, DBS Bank, said there is a window for a rate cut in August with the RBI policy committee cutting its inflation forecasts in June.

Rao said the upcoming inflation will not only undershoot these estimates, but also test the lower bound of the targeted 2-6% range. Inflation is expected to bottom-out in H2’17, but the subsequent recovery will be modest. This opens the door to a 25 basis points repo rate cut in August, she added.

The markets showed enthusiasm after the GST Council relaxed return filing rules for businesses for the first two months.

Driven by the actions to resolve the bad loan problem, banking stocks led by SBI, Axis Bank, HDFC Bank and ICICI Bank extended gains, rising by up to 1.94%.

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