Shares of capital market-focused companies surged on Monday, with HDFC Asset Management Company rising nearly 7 percent, Motilal Oswal Financial Services gaining about 6 percent and Nippon Life India Asset Management advancing nearly 5 percent. The strong gains were seen after Finance Minister Nirmala Sitharaman indicated that the government's recent measures to attract foreign capital were only the "first step" and that additional initiatives could follow.
The rally came amid a broader risk-on move in equities, with the Sensex climbing over 750 points and the Nifty gaining nearly 1 percent. Investors bought asset managers, brokerages, wealth management firms and market infrastructure companies on expectations that stronger foreign capital inflows could boost market liquidity and investment activity.
Reflecting the broad-based strength, the Nifty Capital Markets index rose more than 3 percent, with all 17 constituents trading in the green. Besides HDFC AMC, gains were seen across Motilal Oswal Financial Services, Nippon Life India Asset Management, Nuvama Wealth Management, Groww, Angel One, CAMS, KFin Technologies, CDSL and BSE.
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At around 3 pm, the Nifty Capital Markets index was up 3.2 percent at 5,519.90, making it one of the top-performing sectoral indices of the day. HDFC AMC was the biggest gainer in the index, rising 6.9 percent to Rs 2,627. Motilal Oswal Financial Services climbed 5.7 percent, while Nippon Life India Asset Management gained 4.7 percent. Nuvama Wealth Management rose 4.3 percent and Groww advanced over 4 percent.
Brokerage firm Angel One gained 3.7 percent, while depository operator CDSL rose over 3 percent. Wealth manager 360 One Wam gained 3 percent, followed by CAMS, KFin Technologies and BSE, which rose between 2 percent and 3 percent. Other index constituents, including UTI Asset Management, Anand Rathi Wealth, ICICI Securities, IEX and MCX, also traded higher.
The gains followed comments by Sitharaman at an event, where she said measures announced by the government and the Reserve Bank of India to attract foreign capital were only the beginning of a broader effort to improve overseas investor participation. "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 recognise, we need more foreign capital to come in," the finance minister said.
Her remarks came days after the government expanded the list of securities eligible under the Fully Accessible Route (FAR) for foreign investors and announced tax exemptions on interest income and capital gains earned by foreign portfolio investors from investments in government securities. The RBI has also introduced measures aimed at encouraging foreign currency deposits and external borrowings to support capital inflows.
Sentiment was further boosted by a sharp rally in global equities after reports of a framework peace agreement between the United States and Iran eased concerns over energy supplies and inflation. The development pushed crude oil prices lower and improved risk appetite across global markets.
Back home, benchmark indices remained firmly in the green, although off intraday highs. At 3:01 pm, the Sensex was up 756 points at 76,284, while the Nifty gained 232 points to 23,855.
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