After a decision by the US Congress to avoid a ‘fiscal cliff’ the Bombay Stock Exchange (BSE) benchmark Sensex has jumped by 133 points on January 2, 2013. The jump in points follows continuous capital inflow due to increased buying of capital good stocks and consumer durables.
The benchmark signals a high point since January 6, 2011, after opening at 19,693.30 points. A session high of 19,756.68 points was reached during a session high after which the numbers settled at 19,714.24 points.
It was the first time since January 2011 that Nifty, the 50-scrip NSE index had broken the 6,000 mark, after which it slipped marginally to close at 5,993.25 points.
The US saw a big showdown on New Years Day January 1, 2013, as federal cuts and income taxes took center stage. The House of Representatives managed to overcome resistance from the Republicans to pass the ‘fiscal cliff’ bill by 257 to 167 votes. European firm trends also reflected the change as they rose to a 19-month high as well.
Deepka Pahwa, who is a broker from Delhi said that there was an expectation that RBI will cut interest rates, a fact which caused markets to rally higher than usual. Experts were also of the opinion that buying activity has caused the fastest growth in India’s manufacturing growth over the past six months.