Sheer optimism that Modi Government would unveil strong measures in the Budget next week to put finances and the economy back on track helped Sensex get new life-time highs on Wednesday and rupee rose the most in seven weeks on sustained foreign fund inflows.
Actually, stock and currency markets were enthused after Finance Minister Arun Jaitley on Tuesday said the Government would take bold decisions and pursue path of fiscal prudence to revive economy, indicating that his maiden Budget will not indulge in ‘mindless populism’.
The BSE Sensex intra-day hit life high of 25,864.53 and settled at a new peak of 25,841.21, gaining 324.86 points, or 1.27 per cent -- extending its string of gains to fourth day. In this pre-Budget rally, Sensex has risen 778.54 points.
The broad-based 50-issue CNX Nifty of the NSE flared up by 90.45 points, or 1.18 per cent, to log its new closing peak of 7,725.15. It touched an intra-day peak of 7,732.40. Nifty has gained about 232 points in four days so far.
Strong buying was seen across-the-spectrum as all 12 sectoral indices closed with gains of upto 2 per cent. Metal, healthcare, power, capital goods, auto, FMCG, banking and consumer durable segments logged the biggest rise.
The BSE 30-share barometer resumed better in line with firm Asian cues. It rallied further to a fresh historic intra-day high of 25,864.53. It settled at a new all-time closing high of 25,841.21, logging a rise of 324.86 points or 1.27 per cent.
In straight four sessions of gains, the Sensex has zoomed by 778.54 points or 3.11 per cent.
Foreign investors continued to play a key role behind the pre-Budget rally as they bought scrips valued at Rs 1,290.68 crore on Wednesday. They had picked up shares worth Rs 856.35 crore on Tuesday, as per provisional data.
“We feel that, a progressive Budget as well as other reform initiatives will likely lead to continued out performance of Indian indices v/s emerging market peers. The rise in railway passenger fares and freight charges have raised hopes of a reforms-oriented Budget,” said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
Globally, Asian stocks ended higher after reports showing manufacturing expansion in the US pushed American stocks to records. European markets were also trading higher.Benchmark indices in Hong Kong, South Korea, Singapore,China, Japan and Taiwan rose 0.29 per cent to 1.55 per cent.
In Europe, barometers in France, Germany and the UK moved up by 0.13 per cent to 0.24 per cent. The rupee on Tuesday appreciated 38 paise -- its biggest single-day rise in seven weeks -- to close at 59.69 against the US dollar.
Dollar selling by exporters amid lack of dollar demand from importers and continued capital inflows also helped the rupee rise for the second day in a row.
“INR appreciated against the Dollar on speculation that the government could reveal measures in the budget next week to boost the economy,” said Suresh Nair, Director Admisi Forex.
Major Sensex gainers were Sesa Sterlite (4.44 per cent), NTPC (3.00 per cent), BHEl (2.75 per cent), HDFC (2.71 per cent), Maruti Suzuki (2.25 per cent), Coal India (2.25 per cent), Sun Pharma (2.14 per cent) and M&M (2.06 per cent).
HDFC Bank (1.97 per cent), Hindalco (1.68 per cent), l&T (1.67 per cent), Cipla (1.65 per cent), Dr Reddy’s lab (1.65 per cent) and ITC (1.18 per cent) also gained.
Besides, Hero MotoCorp (1.11 per cent), ONGC (1.08 per cent), RIl (1.01 per cent) and ICICI Bank (1.01 per cent) were among those that notched up moderate rise.
Among the S&P BSE sectoral indices, Metal rose by 2.01 per cent, Power 1.93 per cent, Healthcare 1.88 per cent, Capital Goods 1.67 per cent, Auto 1.42 per cent, Consumer Durables 1.31 per cent, FMCG 1.12 per cent and Bankex 1.06 per cent.
Market breadth remained positive as 1,907 stocks finished with gains while 1,157 stocks ended lower. Total turnover rose to Rs 4,315.78 crore from Rs 3,747.41 crore yesterday.