Key indices witnessed strong buying support in mid-afternoon trade. The Nifty continued its uptrend towards 11,100 seamlessly. Buying was broad based with banks, NBFCs and realty stocks at the fore.
At 14:30 IST, the barometer index, the S&P BSE Sensex, was up 838.2 points or 2.28% at 37,539.82. The Nifty 50 index was up 231.75 points or 2.14% at 11,061.10.
The S&P BSE Mid-Cap index was up 1.64%. The S&P BSE Small-Cap index was up 1.61%.
The market breadth, indicating the overall health of the market, was strong. On the BSE, 1610 shares rose and 762 shares fell. A total of 137 shares were unchanged.
The buying was triggered by finance minister Nirmala Sitharaman announcing measures to revive the economy. Sitharaman after market hours on Friday, 23 August 2019, said the government has withdrawn the surcharge on foreign portfolio investors (FPIs), which she had unveiled in her budget for the fiscal year ending March 2020.
Meanwhile, a foreign brokerage upgraded India to 'overweight' on positive local developments amid rising global uncertainty. Reform measures and sectoral incentives could provide a much-needed booster shot, it said, adding that recovery is expected is the second half of the calendar year 2019 (H2CY19).
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Investors were also hopeful of resumption of trade talks between US and China. China on Monday said that it opposes a trade escalation with the US and is ready to engage in a dialogue. President Donald Trump said on Monday that China is ready to come back to the negotiating table and the two countries will start talking very seriously.
Back home, Westlife Development, which operates a chain of McDonald's restaurants in west and south India through its subsidiary Hardcastle Restaurants, announced its June quarterly earnings. On consolidated basis, the company reported a net loss of Rs 1.13 crore in Q1 June 2019 as compared to a net profit of Rs 9.02 crore in Q1 June 2018. The company's revenue from operations rose 11.8% to Rs 382 crore in Q1 June 2019 over Q1 June 2018. The stock was trading 1.83% higher at Rs 286.1.
Barring metals, all the sectoral indices were trading higher. Metal stocks slumped after escalating tension between China-US trade war shook confidence in the world economy. JSW Steel (down 2.83%), Tata Steel (down 1.86%), Jindal Steel & Power (down 1.82%), Vedanta (down 1.75%), Hindalco Industries (down 1.28%), NMDC (down 1%) were top losers in metal segment.
Investors are concerned that the Sino-US trade war could trigger a worldwide economic slowdown, which could undermine metals usage. China is the world's top consumer of industrial metals. US President Donald Trump, on Friday, announced he will raise tariffs from 25% to 30% on $250 billion in goods that are already being taxed starting 1 October. He also threatened to ratchet up promised tariffs on the remaining $300 billion in Chinese imports from 10% to 15%.
The yield on 10-year benchmark federal paper fell to 6.517% at 14:14 IST compared with 6.564% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.95, compared with its close of 71.66 during the previous trading session.
In the commodities market, Brent crude for October 2019 settlement was up 22 cents at $59.56 a barrel. The contract fell 58 cents or 0.96% to settle at $59.34 a barrel in the previous trading session.
MCX Gold futures for 4 October 2019 settlement rose 1.35% at Rs 39,290.
Overseas, European shares declined as investors reacted to the latest escalation in the US-China trade war. UK market is closed due to a bank holiday. Traders keenly waited for the outcome of G-7 summit held in France.
The US government received a major blow from the French as it plans to implement a 3% so-called "digital tax" on tech giants like Facebook, Amazon and Google. In an act of retaliation, the U.S officials have threatened to impose tariffs on French wine.
Asian shares declined across the board. China's Shanghai Composite fell 1.17% on Monday. China's yuan hit an 11-year low and tumbled to a record low in offshore trade after a sharp re-escalation in the US-China trade war.
"China strongly opposes trade protectionism and blockade in the field of new technologies. China is making efforts to ensure the integrity of production chains, we are ready to resolve the existing problem through consultation and cooperation, we strongly oppose the escalation of the trade war," the media quoted Chinese Vice Premier Liu He as saying.
Liu made these remarks at the opening of the international exhibition Smart China Expo.
US stocks ended sharply lower Friday. Federal Reserve Chairman Jerome Powell left the door open for another interest rate cut in September in a widely anticipated speech in Jackson Hole, Wyoming.
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