The Indian equity markets on Monday touched their new closing highs in almost a year, riding on short covering, expectations of a major economic legislation getting parliament’s approval and healthy inflow of foreign funds.
On a closing basis, the wider 51-scrip Nifty of the National Stock Exchange (NSE) touched a new 52-week high. The barometer 30-scrip sensitive index (Sensex) of the BSE also reached its highest closing levels in 11 months.
The two benchmark indices made substantial gains during the intra-day trade, as healthy buying was witnessed in banking, automobile and consumer durables stocks.
The NSE Nifty surged by 94.45 points or 1.11 per cent to 8,635.65 points. It also touched a new 52-week intra-day high at 8,641.15 points.
The BSE Sensex opened at 27,753.96 points, closed at 28,095.34 points — up 292.10 points or 1.05 per cent from the previous close at 27,803.24 points.
The Sensex touched a high of 28,110.37 points and a low of 27,736.51 points during the intra-day trade.
The BSE market breadth was skewed in favour of the bulls — with 1,715 advances and 994 declines.
On Friday, the benchmark indices were lifted by positive domestic cues and continued inflow of foreign funds. The barometer index rose by 92.72 points or 0.33 per cent, while the NSE Nifty edged up by 31.10 points or 0.37 per cent.
Initially on Monday, the benchmark indices opened on a flat-to-positive note in sync with their Asian peers.
Besides, the equity markets were pushed up by higher European indices, healthy quarterly earnings and above average monsoon rain falls.
In addition, hopes on the passage of the GST (Goods and Services Tax) Bill during parliament’s ongoing monsoon session supported prices.
Further, investors’ expect US Fed to maintain its key lending rates during the upcoming FOMC (Federal Open Market Committee) meet.
A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
Moreover, the benchmark indices rose a day after key finance officials from the G20 group of major economies agreed to work together to support global growth.
The meet also eased concerns over the impact of Britain’s exit from European Union (EU).
However, weak rupee and lower global crude oil prices capped gains.
In the day’s trade, the Indian rupee weakened by 27 paise to 67.35 against a US dollar from its previous close of 67.08 to a greenback.
“Influx of liquidity triggered short covering which pushed up prices,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
“Investors are hopeful of a breakthrough on the GST bill issue and the passage of the bill.”
Vaibhav Agrawal, Vice President and Research Head at Angel Broking said the domestic market indices closed on a positive note as foreign institutional investors (FIIs) buying pushed markets to a 52 week high.
“The key benchmark indices settled with decent gains as the market sentiment was positive with buying across all sectors. Key indices started the session flat but rose during the day to close at a 52 week high,” Agrawal said.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Nifty traded on firm sentiments and settled at new high levels.
“Bank Nifty also traded firm on strong buying support. Most sectors like IT, aviation, pharma and auto witnessed firm sentiments,” Desai noted.
“There was continued buying support for the Sugar sector stocks.”
In terms of investments, the provisional data with exchanges showed that the FIIs bought stocks worth Rs 891.01 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 67.89 crore.
Sector-wise, all the 19 sub-indices witnessed healthy buying. The S&P BSE banking index augmented by 351.85 points, followed by the automobile index, which surged by 197.07 points, and the consumer durables index edged up by 167.29 points.
Major Sensex gainers during Monday’s trade were: Maruti Suzuki, up 3.11 per cent at Rs 4,550.60; State Bank of India (SBI), up 2.86 per cent at Rs 229.85; Asian Paints, up 2.25 per cent at Rs 1,068.85; ICICI Bank, up 2.12 per cent at Rs 269.15; and ONGC, up 1.91 per cent at Rs 226.70.
Major Sensex losers were: Dr. Reddy’s Lab, down 3.62 per cent at Rs 3,474.85; Gail, down 1.04 per cent at Rs 390.95; Bajaj Auto, down 0.76 per cent at Rs 2,700; and Tata Steel, down 0.41 per cent at Rs 363.80.