Market rally stems from investors' expectation of RBI keeping rates unchanged at the Monetary Policy meeting
Amid expectations that RBI may opt for status quo on interest rates on account of inflationary concerns when it announces its bi-monthly monetary policy on Friday, equity indices defied gravity for the fourth straight session on Thursday to finish at new lifetime highs, as investors bought into IT, telecom and FMCG stocks.
A strengthening trend in rupee and unabated foreign fund inflows have bolstered market sentiment, said traders.
After scaling its all-time peak of 54,717.24 during the day, the 30-share BSE Sensex settled 123.07 points or 0.23 per cent higher at its new closing record of 54,492.84, while the broader NSE Nifty rose 35.80 points or 0.22 per cent to its lifetime peak of 16,294.60. It too touched an intra-day record of 16,349.45.
Bharti Airtel was the top gainer in the Sensex pack, surging 4.30 per cent, while Reliance Industries spurted 1.41 per cent, as investors wagered on a two-player telecom market after Kumar Mangalam Birla stepped down as chairman of debt-laden rival Vodafone Idea. ITC, Tech Mahindra, Tata Steel, HCL Tech and HDFC Bank were the other prominent winners, jumping up to 3.14 per cent, while SBI, IndusInd Bank, Bajaj Finance, ICICI Bank, Bajaj Finserv and UltraTech Cement were among laggards, tumbling up to 3.33 per cent.
“Domestic benchmark indices extended gains supported by rebound in IT and metals, to scale new highs. Additionally, recovery in FMCG stocks and RIL, supported the market,” said Binod Modi, head of strategy at Reliance Securities.
Once again, though, it wasn’t a broad-based rally as profit booking in midcap and smallcap stocks continued, he added.
Vinod Nair, head of research at Geojit Financial Services, said, “Despite witnessing consolidation in the opening session, large caps managed to continue trading at record high levels with support from IT, metal and FMCG stocks.”
“Banking stocks continued to be under pressure ahead of RBI’s policy announcement. Importantly, the broad market has started to underperform. Investors should be cautious about performance of mid- and small- caps in the short-term, after the thrilling rally during the year,” he added.
RBI will announce its bi-monthly monetary policy on Friday amid expectations it may opt for status quo on interest rates due to inflationary concerns.
Sectorally, BSE telecom, metal, tech, energy and IT surged up to 3.39 per cent, while realty, bankex, finance and utilities indices ended in the red.
Broader BSE midcap index rose 0.10 per cent, while the smallcap gauge fell 0.43 per cent.
Global equities were mixed, as investors digested corporate results and macroeconomic data. Elsewhere in Asia, bourses in Shanghai, Hong Kong and Seoul ended in the red, while Tokyo closed with gains. Equities in Europe were largely trading on a positive note in mid-session deals.
Brent crude advanced 0.72 per cent to $70.89 per barrel, while the rupee, rising on the trot for the fourth session, inched 2 paise higher to close at 74.17 against the dollar.
FIIs were net buyers in the capital market on Wednesday as they purchased shares worth Rs 2,828.57 crore, as per exchange data.