Sensex, Nifty Rally After RBI's Dividend Bonanza To Govt

(RTTNews) - Indian shares posted strong gains on Thursday despite mixed cues from global markets.

Investor sentiment received a boost after the Reserve Bank of India approved a massive, all-time high surplus transfer of Rs. 2,10,874 crores for FY24, boosting government revenues and aiding fiscal deficit target.

It is believed that the surplus transfer could help the government either borrow less in FY25 or step up capital expenditure.

Investors also cheered the results of a survey, which showed that business activity in India witnessed a robust growth in May, helped by the dominant services industry.

HSBC's flash India Composite purchasing managers' Index, compiled by S&P Global, improved to 61.7 this month from April's final reading of 61.5.

The benchmark S&P BSE Sensex jumped 1,196.98 points, or 1.61 percent, to 75,418.04 while the broader NSE Nifty index closed at 22,967.65, up 369.85 points, or 1.64 percent, from its previous close.

Adani Group stocks topped the gainers list, with Adani Enterprises and Adani Ports climbing 8.2 percent and 4.8 percent, respectively after Group's Chief Financial Officer (CFO) Jugeshinder Robbie Singh mocked a Financial Times (FT) investigative report that found the ports-to-power conglomerate's involvement in an alleged coal scam.

Axis Bank, Eicher Motors and Mahindra & Mahindra rallied 3-4 percent while Hindalco, Power Grid Corp and Sun Pharma dropped 1-3 percent.

Global cues were mixed after the minutes of the April 30-May 1 Fed meeting revealed discussions of a further tightening of interest rates if inflation remained sticky.

The downside, if any, in global markets was capped after AI darling Nvidia delivered another blowout quarterly earnings report and unveiled a 10-for-1 stock split.

Gold pulled back further from record highs as the dollar held near one-week high on concerns that the Federal Reserve may hold interest rates higher for longer.

Oil prices saw modest gains in European trade after falling for three straight session on demand concerns.