The rally in AMC stocks was also supported by expectations that easing of rules and additional reforms could make India a more attractive destination for global investors. Market participants believe that any move to increase foreign participation could benefit the financial sector, especially companies involved in managing investments.
Also Read | Flexi cap fund inflows halve to Rs 5,175 crore in May after record April. Is this profit booking or a buying opportunity? Apart from shares of HDFC AMC, shares of Angel One, CAMS, KFin Technologies, CDSL and BSE also rallied. The shares of KFin technologies and BSE gained 2% each.
The rally came after Finance Minister Nirmala Sitharaman said that steps taken by the government and the RBI to attract foreign investments are just the beginning. While the recent measures have largely focused on the bond market, she indicated that more initiatives could follow as India looks to bring in greater foreign capital and boost overseas investor participation.
On Monday, Sensex surged over 736 points to close at 76,264, while Nifty jumped over 231 points to end the session near 23,854, after briefly crossing 24,000 during the session. Broader markets also gained sharply, with Nifty Midcap 100 and Nifty Smallcap 100 indices gaining more than 1%. This came as India VIX, which measures volatility in markets, dropped over 3% to 14.24.Her comments came shortly after the government took additional steps to attract foreign investors. These included expanding the list of government securities available to overseas investors under the Fully Accessible Route (FAR) and offering tax benefits on interest income and capital gains earned from such investments. Also Read | Mutual funds reduce cash allocation by over Rs 10,000 crore to Rs 1.87 lakh crore in May
The RBI has also introduced measures to encourage foreign currency deposits and overseas borrowings, with the aim of boosting capital inflows into the country.
Investor sentiment also received a boost from a rally in global markets after reports of a framework peace agreement between the US and Iran eased concerns over energy supply disruptions and inflation. The development led to a decline in crude oil prices and improved risk appetite across global financial markets.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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