Key facts
- HDFC AMC and Nippon Life India AMC shares rose as much as 6%.
- Finance Minister Nirmala Sitharaman indicated further measures to attract foreign capital are planned.
- The government and RBI have implemented steps to boost capital inflows, including tax relief and expanded investment options.
- These measures aim to reverse capital outflows and strengthen the Indian rupee.
- Global sentiment improved due to eased U.S.-Iran tensions, impacting oil prices and risk appetite.
Shares of HDFC Asset Management Company and Nippon Life India Asset Management Company experienced a significant rally, climbing up to 6% on Monday. This surge followed Finance Minister Nirmala Sitharaman's indication that the government's recent initiatives to attract foreign capital are just the initial steps, with more measures expected. Market participants believe that these potential reforms could enhance India's attractiveness to global investors, particularly benefiting the financial sector and investment management firms.
Several other financial stocks also saw gains, including Angel One, CAMS, KFin Technologies, CDSL, and BSE. The positive sentiment was further bolstered by government actions, such as expanding the list of government securities available to foreign investors under the Fully Accessible Route and offering tax benefits on interest income and capital gains. The Reserve Bank of India has also implemented measures to encourage foreign currency deposits and overseas borrowings to boost capital inflows.
Globally, investor sentiment was lifted by reports of a framework peace agreement between the U.S. and Iran, which eased concerns over energy supply disruptions and inflation. This development contributed to a decline in crude oil prices and an improved risk appetite across financial markets. Consequently, major Indian indices like the Sensex and Nifty closed substantially higher, with broader market indices also posting gains. The India VIX, a measure of market volatility, saw a notable decrease.