Sensex Zooms 440 pts to 13-mth high, Nifty Breaches 8,700 Mark

Mumbai: After a gap start, Sensex regained crucial 28,000 mark, while Nifty broke past the crucial resistance level of 8,700 on Tuesday. realty, power, oil and gas, consumer durables, capital goods, banking and auto stocks led the gains on the Dalaal Street.

BSE Sensex on Tuesday zoomed over 440 points to close at an over 13-month high of 28,343.01, while the broader Nifty went past the psychological 8,700-level to finish at 16-month high of 8,744.35, lifted by positive global cues.

Market observers attribute the reasons for today’s huge gains on the domestic bourses to doubts over rate hike, bull run prediction by Rakesh Jhunjhunwala, technical correction and global liquidity.

Overnight gains on the US bourses with investors tapering the soon rate hike outlook triggered a rally in broader Asian and European markets, helping in reviving the domestic sentiment as well after a brief phase of sluggishness. Besides, a sustained FII buying, a slew of positive corporate results as well as RBI’s bullish annual growth report also added to positive cues.

Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services, said: “Market regained its strength as FIIs continue to pour into the domestic market despite a likely hike in FED rate. FII inflow has improved post a muted trend seen last week awaiting the FED chair’s speech last Friday. Global markets continue to be positive as investors have largely factored an interest rate hike in 2016. A firm trading momentum witnessed as retail investors and funds piled up positions in key frontline shares across the sectors led by auto, IT, capital goods, banks, financials, metals, consumer durables, oil&gas, power, realty, teck infrastructure, healthcare, PSUs, energy, utilities and basic materials.”

The second-line midcap and smallcap companies also witnessed heavy buying; however, the telecom sector saw selling. Reserve Bank reported a near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 per cent this year, primarily due to better monsoon, as well as better money in the hands of government employees owing to the 7th Pay Commission implementation, while it underlined bearish global growth.

The 30-share Sensex resumed at 28,012.46 and moved between a high of 28,478.02 and a low of 28,010.66 before concluding at 28,343.01, showing a gain of 440.35, or 1.58 per cent over its last close. The Sensex had closed at 28,370.84 on July 23, 2015. The NSE Nifty also climbed 136.90 points, or 1.59 per cent, to 8,744.35 after trading between 8,750.60 and 8,642.25. (The key index had closed at 8,750.20 on April 15, 2015).

Asian stocks ended higher, while European market also opened on a positive note tracking overnight gains in the US market weighed by increased prospects for Federal Reserve rate hike this year.

Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 286.52 crore on Monday as per provisional data released by the stock exchanges.

Rupee at one-month high

Meanwhile, rupee in forex market jumped to one-mth high on strong RBI macro view The rupee staged a solid recovery against the US dollar by rising 16 paise to end at 67.02, its highest highest level in a month, on heavy selling of the greenback by exporters and banks.

A massive rally in domestic equities along with smooth supply of dollars on the back sustained capital inflows into equities and debt predominantly helped the upmove. Bullish comments from RBI that near-term outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 per cent in 2016-17, further bolstered sentiment, a forex dealer said.

The gross domestic product (GDP) data for the June quarter and fiscal deficit data for July will be released tomorrow. In the meantime, the US dollar maintained its bullish momentum to hit a two-week high against other major trading counterparts on buoyant expectations of a Federal Reserve rate rise in the midst of hawkish comments from Fed chair Janet Yellen.

The home currency opened higher at 67.13 from yesterday’s closing value of 67.18 at the Interbank Foreign Exchange (forex) market and continued its ascend to close with a solid 16 paise gain, or 0.24 per cent at 67.02 - the level not seen since July 29 this year. It had lost 12 paise to close at near one-week low of 67.18 yesterday against the dollar. The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25 per cent at 95.78 in early trade.

Source: PTI