Sensex goes past 31K, makes history
Mumbai: Stocks defied gravity for the second straight session on Friday, propelling the Sensex past the 31,000-mark for the first time ever on the third anniversary of the Modi government. The broader Nifty too breached the 9,600level, also in a first, before settling at a record high of 9,595.10. Sustained buying propped up the market amid optimism for more reforms.
Continuing with their winning momentum, the equity markets rose to yet another record high on Friday with the Sensex closing above the 31K level mark for the first time amidst strong current of liquidity from both domestic and overseas investors.
The Sensex soared 278.18 points or 0.90 per cent to close the session at 31,028.21 while the Nifty zoomed past the 9,600 level mark in the intra-day trade before ending the day at 9595.10, up 85.35 points or 0.90 per cent.
“We are now in the midst of a bull market rally, which is showing a higher level of maturity when compared to the previous rallies. The market is rewarding those stocks with good fundamentals. So a long-term investor can consider investing in quality stocks at these levels and any intermittent corrections in the markets should not be a major cause of concern for them,” said Jagannadham Thunuguntla, head of fundamental research at Karvy Stock Broking.
Experts added that FPIs have created fresh long (buy) positions in index futures contract signalling the underlying bullish sentiments in the market.
“FPIs too participated in Friday’s rally as they were net buyer in index future segment worth `884 crores with fall in open interest, indicating good amount of short covering in index futures. In last two sessions, FPIs have exited more than two third of their short positions (bearish bets) in index future and added some fresh longs (bullish bets). As a result, their ‘Long/Short Ratio’ has soared to 85:20, indicating optimism in the market,” said Jay Purohit, technical and derivative analyst, Angel Broking.
The broader markets too recovered from their recent weakness and outperformed the front line stocks. While the BSE mid cap index soared 2.06 per cent, the BSE small cap index posted a gain of 1.60 per cent.
Out of 2,848 stocks traded on the BSE, 1,822 stocks ended the day higher as compared to 851 stocks that declined. India’s volatility index (VIX), which measures investors expectation about the near term volatility spiked 3.97 per cent on the NSE signalling some amount of nervousness among traders.
“The minutes from the US Federal Reserve’s May policy meeting were in large part responsible for the sudden spike in enthusiasm. The underlying positive sentiments could also be attributed to an early and normal monsoon forecast. Things are also improving on the macro front, with GST implementation on the horizon and the passage of ordinance for the resolution of bad assets that are providing a higher level of confidence to the market,” said Vijay Singhania, founder director, Trade Smart Online.