Continued with their record setting spree for the third day in a row, the benchmark index BSE Sensex on Thursday made its lifetime high of 29,006.02, a gain of 117.16 points. Buoyed by sustained capital inflows and strong buying from foreign institutional investors, the NSE Nifty also rallied to 8,761.40, an increase of 31.90 points.
However, despite the strong capital inflows, the rupee lost seven paise against the dollar at 61.70 due to fresh demand for the US currency from banks and importers and gold retreated from five-month highs by falling Rs150 to Rs28,350 per ten gram at the bullion market.
It took 50 trading sessions from November 12 to January 22 to reach the historic 29,000-level from 28,000. With global investors expecting a stimulus from the European Central Bank (ECB) to improve the liquidity scenario, the investor sentiment in India is bolstered by the surprise rate cut by the Reserve Bank of India and lower oil prices.
According to the provisional data, foreign portfolio investors (FPIs) bought shares worth a net Rs2,065.49 crore. Shiv Kumar Goel, co-founder Bonanza limited says the growth oriented macro economic data, better earnings by companies and positive global cues, helped the key indices to hit new highs.
“There is a positive mood in the market just ahead of the budget. Better tax reforms and incentives to industry will take the markets to much higher levels,” Goel added.
On the capital account front, analysts are predicting a surplus for the first time in more than seven years as falling crude oil prices and lesser gold imports would ease the pressure on the country’s trade balances. Nomura in its report, expects the current account balance to swing into a surplus of about 1.5 per cent of gross domestic product for the January to March quarter.
Morgan Stanley estimates that India may finally swing into a minor surplus of 0.3 percent of GDP in 2015. The bank cites the collapse in the price of oil - India’s largest commodity import - and lower gold imports as the two main factors helping the current account balance.
Market experts believe the RBI would further cut interest rates that would revive investment sentiments. Also, the Government plans to begin a massive public investment programme from 2015-16, will surely give growth a rise in 2016.
The BSE barometer surpassed the key 29,000-level in early trade with healthcare, capital goods and auto shares in particular attracting investor interest.
Sectorwise, BSE Healthcare index gained the most by rising 1.69 per cent, followed by Capital Goods index 1.12 per cent, Auto index 0.72 per cent, Metal index 0.67 per cent, Realty index 0.54 per cent, IT index 0.45 per cent, Banking index 0.37 per cent, Power index 0.22 per cent and FMCG 0.20 per cent.
Buying activity in small and mid-cap also gathered momentum with the BSE mid-cap index rising by 0.07 per cent and small-cap index by 0.23 per cent. However, NTPC fell by 2.44 per cent, Reliance Industries by 2.27 per cent, Hero Motocorp down by 1.33 per cent and Maruti down by 1.02 per cent.
Most Asian stocks ended higher as investors bet the European Central Bank will unveil a bond-buying stimulus programme later in the day in an attempt to revive the flagging euro zone economy.
Key benchmark indices in China, Japan, Hong Kong, Singapore and Taiwan moved up by 0.28 per cent to 0.70 per cent while South Korea’s Kospi eased by 0.02 per cent. European markets were trading narrowly mixed on caution ahead of the outcome of a monetary policy review. Key indices in France and Germany moved down by 0.22 pc to 0.28 pc, while UK’s FTSE was quoted marginally higher by 0.11 pc.