MUMBAI: Sensex and Nifty, the two leading indices, hit new all-time highs in late trades on Thursday as RBI’s record Rs 2.1 lakh crore dividend payment to the govt boosted investor sentiment on Dalal Street. Strong foreign fund buying through the session and short covering by speculators late in the session also helped the rally, market players said. Dalal Street investors are also betting on smooth sailing for BJP in the ensuing Lok Sabha elections for a third term. Encouraging macroeconomic data and expectations of an early onset of monsoon also helped.
Sensex opened the session flat, dipped into negative and then recovered to start a rally that continued till the end of Thursday’s session. After scaling an all-time high at 75,500 points in intra-day trades, the index closed at 75,418, up 1,197 points, or 1.6%.
On NSE, following a similar trajectory, nifty scaled a new life-high of 22,994 points, and closed at 22,968 points, up 370 points or 1.6%.
NSE mcap too crosses $5 trillion-mark
The day’s session also made investors richer by Rs 4.3 lakh crore, with BSE’s market capitalisation now at Rs 426.9 lakh crore, also a new life-high mark, official data showed. On Thursday, NSE said its aggregate market cap had crossed the $5-trillion mark, two days after BSE achieved the same milestone.
According to Vinod Nair, head of research, Geojit Financial Services, leading indices posted arecord gain with sectors such as banking and automotive outperforming. “RBI’s record divi dend is akin to an indirect rate cut and is expected to reduce bond yields. The broader market remained buoyant, aided by the composite HSBC PMI data for May, which indicated strong expansion,” Nair wrote in a note to investors. “Early onset of southwest monsoon has provided a boost to the domestic market, which was underperforming in the last two months to other emerging markets.”
The day’s rally was led by foreign funds that were mostly on a selling spree since April. At a net buying figure of Rs 4,671 crore, the day’s tally was the highest net inflow figure since April 8, ETIG data showed. Compared to strong buying by foreign funds during the day’s session, domestic funds recorded a muted Rs 147 crore net inflow, BSE data showed.
