Asset management stocks surge after Sitharaman hints at more reforms
What's the story
Shares of capital market-focused companies witnessed a major rally on Monday. The spike was led by HDFC Asset Management Company, which jumped nearly 7%, followed closely by Motilal Oswal Financial Services at about 6% and Nippon Life India Asset Management at nearly 5%. The sharp rise came after Finance Minister Nirmala Sitharaman hinted that the government's recent measures to attract foreign capital were just the "first step."
Market reaction
Sitharaman's remarks fuel market rally
The market rally was fueled by Sitharaman's comments at an event, where she said that measures announced by the government and Reserve Bank of India(RBI) to attract foreign capital were just the beginning. "Although at the moment it's confined to the bond market, certainly that's not the end of the story. There will be more, We recognize, we need more foreign capital to come in," the finance minister said.
Index performance
Nifty Capital Markets index rises over 3%
The Nifty Capital Markets index also reflected the market's optimism, rising over 3% with all 17 constituents trading in the green. Apart from HDFC AMC, Motilal Oswal Financial Services, and Nippon Life India Asset Management, firms like Nuvama Wealth Management, Groww, Angel One, CAMS, KFin Technologies, CDSL, and BSE also witnessed gains. The index was up 3.2% at 5,519.9 at around 3pm on Monday.
Policy changes
Government expands list of securities for foreign investors
Sitharaman's remarks came after the government widened the list of securities eligible under the Fully Accessible Route (FAR) for foreign investors. The move also included tax exemptions on interest income and capital gains earned by foreign portfolio investors from investments in government securities. Meanwhile, the RBI has also taken steps to promote foreign currency deposits and external borrowings to boost capital inflows.