Brexit deal helps stocks post longest gaining streak since March

Sensex, Nifty gain for 5th day; auto, banking stocks gain the most

The benchmark indices on Thursday rose by more than a per cent, capping their longest gaining streak in seven months after the European Union (EU) and the UK reached a historic Brexit deal. Most European markets and the US equity index futures rose, while the sterling hit a five–month high, after negotiators from the UK reached an agreement with officials in Brussels that could pave the way for Britain’s departure from the EU.

The benchmark Sensex gained 1.2 per cent, or 453 points, to end at 39,052, while the Nifty50 index added 122 points, or 1.1 per cent, to close at 11,586. Both the indices have gained over 3 per cent each by rising for five consecutive trading sessions. Previously, they had gained for five straight sessions in March.

Shares of companies with ties to the UK gained the most. Tata Motors rose more than 10 per cent, second-most among Sensex companies, Motherson Sumi Systems added 12 per cent, and Mastek gained more than 4 per cent.

Market players said the Brexit deal will help end the uncertainty for these companies.

“Most India stocks had fallen a lot and Brexit deal has had some sentimental impact to boost investors’ confidence. Companies with exposure to Europe will benefit due to the Brexit deal on valuations,” said Chokkalingam G, founder and managing director at Equinomics Research & Advisory.

The Indian markets have been making positive strides, thanks to positive buying by foreign portfolio investors. In the past four sessions, they had pumped in over Rs 10,000 crore into domestic stocks. On Thursday, they bought shares worth Rs 1,159 crore, while their domestic counterparts were net-sellers to the tune of Rs 512 crore.

“Two major concerns for the global economy have been the trade skirmishes between the US and China and a ‘no-deal Brexit’. Early indications are that a Brexit deal has been done. This augurs well for the global economy. If the US-China trade deal also happens, that will be very good news for the global economy,” said V K Vijaykumar, chief investment strategist, Geojit Financial Services.