Sensex zooms 440 points to 13month high
Investor wealth hits record ₹110.7 L cr; Nifty, too, at its highest in 16 mths
Markets rose for the second straight session on Tuesday, with the Sensex surging over 440 points, or 1.5%, to end at an over 13-month high of 28,343.01, while the Nifty hit a 16-month high of 8,744.35, a gain of 136.9 points, driven by sustained inflows from foreign institutional investors (FIIs) and strong earnings announcement by companies.
Investor wealth rose by ₹1.39 lakhcro re and at the end of day’ s trade, the total market capitalisation (m-cap) of Bombay Stock Exchange (BSE)-listed companies stood at an all-time high of ₹110.7 lakh crore.
Tracking strong equities, the rupee also rose 16 paise to end at 67.02 against the US dollar, the highest in a month, on heavy selling of the greenback by exporters and banks.
Analysts expect loose monetary policies in global markets and improving macro-economic fundamentals back home to keep the fund flows ticking.
“Renewed buying interest from FIIs helped benchmark indices to break free off the excruciating range seen all through August, and this seemed to have attracted further participation from those waiting for a clearer signal,” said Anand James, chief market strategist, Geojit BNP Paribas Financial Services.
So far in August, FIIs have pumped in ₹8,682 crore in stocks, taking their total investment for calendar 2016 to ₹40,462 crore.
Auto, fast-moving consumer goods, banks, pharma and IT stocks were among the major Sensex gainers on Tuesday.
“Multiple drivers are falling in place to engineer a positive confidence-shock for Indian consumers. A boost to per capita disposable income for central government employees, coupled with a good monsoon season (after two consecutive years of drought), low interest rates and easing liquidity should provide a significant boost to aggregate demand in the second half of the current fiscal year,” said Abhay Laijawala, research head, Deutsche Equities India.
The Sensex has risen about 23% from a low in February, but analysts do not consider the market to be over-valued.
“While equity markets have run up significantly, valuations look reasonable given India’s improving macro-economic fundamentals, continued reform momentum and expected recovery in corporate earnings… We expect inflows to continue,” said Sanjay Kumar, chief investment officer, PNB Metlife Insurance.
Overseas, the US dollar maintained its bullish momentum to hit a two-week high against other major trading counterparts, on expectations of a hike in interest rates by the US Federal Reserve in its policy in September.