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The benchmark Sensex and Nifty on Thursday closed at their highest level in three months on the back of gains in banking stocks, after the government approved a composite investment cap for foreign investors.
Other global markets also gained after the Greek parliament approved the new bailout terms. The BSE Sensex gained 247.83 points, or 0.88 per cent to 28,446.12, the highest close since April 16. The National Stock Exchange’s Nifty closed at 8,608.05, up 84.25 points, or 0.99 per cent.
The Union Cabinet removed separate caps for foreign direct investments (FDI) and foreign portfolio investments (FPI), replacing these with a single upper limit in a bid to make foreign investments easier.
Shares of Axis Bank gained 4.1 per cent, YES Bank gained three per cent and Kotak Mahindra Bank rose about four per cent.
On Thursday, FPIs bought shares worth Rs 750 crore, provisional data provided by stock exchanges showed.
The Indian market has climbed 2.8 per cent this week on hopes that the recent drop in oil prices will help easing interest rates. Crude oil prices have fallen 15 per cent from their June peaks.
“A strengthening dollar, slowing China and the recent Iran nuclear deal all point towards a lower-for-longer commodity price environment. By virtue of its net commodity importer status, India stands out relative to its emerging market peers,” said Deutsche Bank analysts Abhay Laijawala and Abhishek Saraf, in a note.
Market players said, along with the first quarter earnings and monsoon progress, investors will also closely watch the upcoming session of Parliament, where key Bills such as land acquisition and Goods and Services Tax will be discussed.
