Moving closer to the 20000-mark, Bombay Stock Exchange benchmark index Sensex on Monday rallied by 311.35 points to a 32-month high of 19906.10, as investors flocked to buy heavyweights such as Reliance Industries, ITC and HDFC.
Another benchmark index Nifty of the National Stock Exchange also surged by 103.55 points to 5980.45.
Both indices closed at their highest levels since January 15, 2008, while in intra-day trade they scaled their record peaks since January 17 in the same year.
Sensex hit an intra-day high of 19927.30, while Nifty peaked at 5989.50 during the day. Sensex and Nifty had last traded above 20000 and 6000, respectively, on January 17, 2008.
Interestingly, the future contracts of Nifty for September and October have already crossed the 6000 level.
According to analysts, the indices are all set to surpass these psychologically important levels in early morning trade on Tuesday, unless there are some unexpected negative global cues once the U.S. market opens later on Monday.
Market experts attributed Monday's rally, the second consecutive day of uptrend, to continuing surge in foreign investment flows as also huge buying interest in blue-chips such as Reliance Industries, ITC, L&T, Infosys as also financial sector majors like HDFC, HDFC Bank and ICICI Bank.
“The rally is fuelled by huge inflows from overseas fund houses as they see higher growth returns in emerging economies like India, where fundamentals are strong,” Kotak Mahindra Old Mutual Life Insurance Chief Investment Officer Sudhakar Shanbhag said. Betting big on the Indian equity markets, foreign fund houses have invested over Rs.71,000 crore ($15.6 billion) so far this year and analysts believe that it will soon breach the record of Rs.83,400 crore achieved in 2009. FIIs play a major role in the stock markets and their movement (inflows and outflows) causes fluctuation in benchmark indices.
RIL, which holds the maximum weight in Sensex, surged by 1.24 per cent to close at Rs.1,039.70.
