Sensex hits record high as consumer stocks surge
By Reuters | Published: 19th May 2017 10:16 AM |
The benchmark BSE index rose as much as 0.9 percent to a record high on Friday, scaling an all-time peak for the fourth time in five sessions, as consumer goods makers surged after the government finalised rates for its upcoming goods and services tax (GST).
India set GST rates for more than 1,200 items on Thursday, and analysts said the outcome had largely benefited the fast-moving consumer goods sector after rates for products like hair oil, soaps and toothpaste were brought down to 18 percent from 22-24 percent.
The Nifty FMCG index surged as much as 4.4 percent to a record high with constituents ITC and Hindustan Unilever Ltd rising to their highest ever as well.
But some analysts warned markets were at a risk of correction should global markets tumble amid ongoing political turbulence around U.S. President Donald Trump.
"The finalisation of GST is very positive for the markets and the gains are expected to continue," said Vaibhav Chowdhry, head of research at KR Choksey Investment Managers.
"If the political situation in the United States takes a turn for the worse, domestic shares could correct by 10-15 percent, but it will only be temporary."
The benchmark BSE Sensex was 0.59 percent higher at 30,614.02 as of 0535 GMT, while the broader NSE Nifty was up 0.51 percent at 9,477.35.
The NSE index has gained 0.69 percent so far this week, while the BSE index has risen 1.29 percent. Both the indexes are on track for a second straight weekly gain.
Among other gainers, Bank of Baroda Ltd rose as much as 4.5 percent after the public sector lender reported a net profit of 1.55 billion rupees ($23.92 million) for the March quarter, compared with a net loss in the year-ago period.
State Bank of India was up 2.1 percent ahead of its March-quarter results later in the day.