Indian markets surged to a six-month high on Monday and ended at the pre-covid level. Benchmark indices gained nearly 1% and closed at levels last seen on 27 February. The BSE Sensex ended at 38,799.08, gaining 364.36 points or 0.95%. The Nifty was at 11,466.45, up 94.85 points or 0.83%.
A rise in global peers supported Indian equities while sentiment was also boosted because of the government’s relaxation in goods and services tax (GST) compliance.
In the Asia Pacific region, markets in South Korea and Hong Kong gained more than 1% after Wall Street hit a new high despite lingering unease about a possible second wave of coronavirus infections but boosted by hopes of an early discovery of a vaccine. The Financial Times’ report saying that the administration of US President Donald Trump is considering bypassing normal US regulatory standards to fast-track an experimental coronavirus vaccine from the UK for use in the US ahead of the presidential election added strength to the vaccine hopes.
“Global cues helped the Indian market to close in positive territory with exceptional strength shown in US futures, Hong Kong and European markets,” said Shrikant Chouhan, executive vice-president of equity technical research, Kotak Securities. Markets in India ignored the rising cases of infections and instead kept riding the momentum brought about by ample liquidity and expectations of a recovery, analysts said.
What also cheered investors is the announcement by the finance ministry that businesses with an annual turnover of up to ₹40 lakh are now GST exempt, adding that those with a turnover of up to ₹1.5 crore can opt for the composition scheme and pay only 1% tax. The ministry said the government has introduced relaxations to ease GST compliance burden during crisis.