Benchmark equity indices touched new highs on the back of a global rally after it emerged that the Federal Reserve would increase interest rates only after the U.S. economy showed strong signs of a recovery.
The 30-share Sensex gained 448.39 points, or 1.48%, to close at 30,750.03 on Thursday. The surge was across sectors as a total of 1,862 stocks gained on the BSE, as against only 827 declines. Most sectoral indices also ended with gains.
The broader Nifty of the National Stock Exchange (NSE) closed at 9,509.75, up 1.59% or 149.20. Short covering ahead of the expiry of the derivative contracts also acted as a catalyst for the rally. Among the leading Asian indices, Nikkei, Hang Seng and Kospi posted advances on Thursday. “Sentiment was upbeat from the beginning, taking cues from the Fed meeting minutes, wherein indications were mixed on rate hike in June,” said Jayant Manglik, president, Retail Distribution, Religare Securities. “It further gained momentum in the latter half, partially due to a strong surge in select index majors and short covering in derivatives space.” The top gainers included L&T, ICICI Bank, HDFC Bank, SBI, Wipro, Maruti Suzuki India and TCS.
Incidentally, banking stocks have been in the limelight ever since the Centre and the Reserve Bank of India have been focussing on addressing the bad debt issue in the sector. The market is getting support from renewed buying by foreign investors as well with the current month’s flows pegged at ₹8,218 crore, after April saw tepid flows at ₹2,394 crore.
