Last Updated: July 20, 2022, 2:23 PM IST
The markets have logged strong gains in trade so far on Wednesday, led by Reliance and ONGC after the government reduced windfall tax on fuel exports and domestic oil output. Further, buoyant global cues also aided the sentiment. An overnight rally was seen in US stocks, slight weakness in the dollar and the overall positive sentiment across Asia lifted stocks on Wednesday. Around 13:30 hrs, The BSE Sensex soared over 750 points to 55,500, and the NSE Nifty50 topped 16,550.
Key Factors Why Sensex, Nifty Are Rising
Elimination of Taxes
Due to the government cutting the windfall tax on diesel and aviation fuel shipments by Rs 2 a litre, and scrapping completely a Rs 6-per litre levy on gasoline exports, the most-valued stock on Dalal Street rallied on Wednesday morning. Morgan Stanley said Reliance and other refiners will see a reduction in overhang and equity valuations and should start pricing in high sustainable energy margins as the government intent gets clear. Reliance alone contributed 165 points positively to Sensex’s positive run today.
Dollar index
The dollar index fell for the fifth session after analysts trimmed bets on the pace of US Federal Reserve interest rate hikes. Earlier, analysts were expecting a 100 basis point hike in its next fed policy after the US recorded 41-year high inflation but now they expects 75 basis points. Investors are seen staying a bit cautious ahead of a European Central Bank policy meeting. The next Fed meeting is on July 26-27.
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