Sensex, Nifty hit new peaks

After a day's breather, the benchmark indices Sensex and Nifty resumed recordsetting rally to scale new peaks on Monday and logged their best single-day gains in nearly five months, tracking positive global cues as investors took heart from the US Federal Reserve's "gradual approach" comments on monetary policy tightening.

The BSE Sensex surged over 442 points to close at its life-time high of 38,694.11 and the broader NSE Nifty ended at a fresh record of 11,691.95, rising 134.85 points. Both indices recorded their biggest single-day gains in nearly five months. On April 5 this year, the 30-share Sensex had rallied 577.73 points and the Nifty 50 had jumped 196.75 points.

Last week, US Federal Reserve Chairman Jerome Powell had said that a "gradual approach" to interest rate hikes would be in the best interest of the US economy and jobs generation, lifting Wall Street sentiment at the week's close. Asian shares too ended higher and European markets were firm in their early deals, tracking Friday's gain in US stocks.

Also, global markets reacted positively to the People's Bank of China announcement that it was tweaking its methodology for the fixing of the yuan's daily midpoint as part of efforts to stabilise the currency market. Sentiment also got a boost on unabated buying by domestic institutional investors (DIIs) and fresh foreign fund inflows, giving push to trading activities.

"Market rallied to new high supported by positive global market followed by Fed's comment on gradual pace of rate hike which boosted investors sentiment. The rally was broadbased given the sense of improved outlook on account of revival in earnings growth. Despite high valuations, continued buying by FIIs and DIIs adding liquidity in the market," Vinod Nair, Head of Research, Geojit Financial Services, said.