SENSEX CROSSES 62K, CLOSES AT ALL-TIME HIGH
MUMBAI: Equity benchmark BSE Sensex closed at an all-time high of 62,272.68 on Thursday, tracking a firm trend in global markets after the US Fed minutes indicated a slower pace of rate increase that bolstered investors’ sentiment.
Extending its rally to the third straight day, the 30-share BSE benchmark rallied 762.10 points or 1.24% to settle at 62,272.68, its record closing peak. During the day, it jumped 901.75 points or 1.46% to its lifetime high of 62,412.33. The broader NSE Nifty gained 216.85 points or 1.19% to end at 18,484.10. During the day, it hit its 52-week high of 18,529.70, higher by 262.45 points or 1.43%.
NEW DELHI: Hopes of slower US rate hikes and cooling crude prices cheered Indian stocks, with the benchmark indices closing at record highs on Thursday. All sectoral indices gained, and the Sensex and the Nifty rose 1.24% and 1.19%, respectively, to close at all-time highs of 62,272.68 and 18,484.10. During the day, the Sensex hit a new high of 62,412.33, while the Nifty was just a few points away from its record high of 18,604.45.
Minutes of the US Federal Reserve’s last meeting showed that most officials remained in favour of going slow on interest rate hikes, lifting stock market sentiments worldwide.
Financial services stocks and a few public sector banks hit new 52-week highs on Thursday. In addition, value-buying was seen in IT stocks on the back of attractive valuations and a rally in the Nasdaq index, analysts said. “Investors wound up short positions on the expiry date, triggered by US Fed minutes indicating a moderate pace of rate hikes going ahead that eventually propelled benchmark indices Sensex and Nifty to new all-time highs,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities Ltd. The falling US
Dollar index and bond yields also improved risk appetite and led to broad-based buying, analysts said.
The yield on the 10-year US treasury bond fell to 3.69%, and the dollar index slipped to 106. According to V.K. Vijayakumar, chief investment strategist, Geojit Financial Services, so long as this trend continues, bears will be on the back foot. In India, macro news confirms the economy is resilient, and investment is gaining momentum, Vijaykumar said, adding latest RBI data show credit growth at an impressive 17% year-on-year, which is good for banking and capital goods stocks.
Meanwhile, crude prices softened as Group of Seven (G7) nations pressed for a price cap on Russian oil and as crude oil inventories in the US rose above analysts’ expectations. Brent at $84-85 a barrel has slipped to 10-month lows, levels not seen since early January.
Anindya Banerjee, vice-president of currency derivatives and interest rate derivatives at Kotak Securities Ltd, said the rupee had been an underperformer in the past fortnight, primarily on account of demand for dollars from oil marketing firms and some bids from foreign portfolio investors. However, on Thursday, the rupee closed 21 paise stronger at 81.63, as traders sold dollars after the release of US Fed minutes. The weak dollar and strong risk sentiments can continue to push the rupee towards ₹81.25/30 to a dollar level, added Banerjee, who expects an overall range of 81.25-81.85 in spot markets.
Foreign portfolio investors were net buyers of ₹1,231.98 crore worth of equities on Thursday, provisional data indicated. FPIS have remained net buyers of equities in November.
Global markets rallied on the rate relief, falling US volatility index, and the fall in the Dollar Index and US Treasury yields, said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd. Once the Nifty is able to cross 18,604, Khemka expects the index to inch up towards 19,000 levels.