Major stock indices continued their gain on Wednesday as the U.S. Congress passed the fiscal cliff deal ending fears of a steep hike in taxes on American citizens. Fiscal cliff was referred to the economic effects that would have triggered tax increases, spending cuts and reduction in the U.S. budget deficit beginning 2013.
With this positive news, hectic buying was witnessed at the Indian bourses with foreign funds and retail investors buying blue chip stocks. Rising factory output numbers also aided the bullish sentiment.
Amidst buying momentum, the NSE Nifty breached the 6000-mark, a level tested in January 2011. However, with profit-booking, both the Bombay Stock Exchange sensitive index (Sensex) and Nifty closed slightly lower.
The NSE Nifty closed at 5993.25, up 42.40 points. The top five Nifty gainers included Bajaj Auto (up 3.66 per cent), JP Associates (up 3.40 per cent), Maruti (up 3.28 per cent), BPCL (up 3.14 per cent) and IDFC (up 3.08 per cent).
Similarly, the Sensex, after touching a high of 19757 closed at 19714.24, up 133.43 points. The top five Sensex gainers included Bajaj Auto, Maruti, ONGC, BHEL and Sterlite. Automobile and banking stocks gained the most.
“The resolution of the fiscal cliff situation was a major relief. There was also hope that the Reserve Bank of India would bring down interest rates. All these triggered buying activity,” said Devan Choksey, managing director, KR Choksey Share and Securities. “The New Year has begun on a bullish note and I think the market can touch all-time high before March,” said Motilal Oswal, CMD, Motilal Oswal Financial Services Ltd.