Investor wealth in Indian stocks rises to record $1.5 tn
Boosted by heavy buying foreign institutional investors (FII) and fresh buying in real estate and oil & gas shares, the benchmark Sensex surged by 376.95 points and ended at a new closing high of 25,396.46. Aided by strong performance from the equity markets, rupee appreciated by 16 paise and ended at Rs 59.17 per dollar, its biggest daily rise in a fortnight.
Both, Sensex and Nifty surged to new intraday highs FIIs invested heavily in the markets as the onset of the southwest monsoon and hopes of hike in natural gas prices. The market tempo was upbeat for the second day in a row, pushing up Sensex to a new all-time intra-day high of 25,419.14. The index surpassed its previous record high of 25,375.63 registered on May 16 and its previous record close of 25019.51 hit on Thursday. On weekly basis, Sensex has bounced back by a whopping 1,179.12 points or 4.89 per cent.
Similarly, the wide-based Nifty jumped 109.30 points to end above 7,500-mark for the first time at 7,583.40. It also crossed its all-time intra-day high of 7,563.50 hit on May 16. As per experts, decision of the European Central Bank to cut its benchmark interest rates to unprecedented lows to pump money into the sluggish euro zone economy also boosted domestic market sentiments.
“Markets rose sharply for the week, reaching new all-time highs. Announcement of stimulus by ECB and continued optimism on economic reforms in India led to big gains. Expectations of resolution to the gas pricing issue helped stocks like RIl and ONGC register gains. We see the monsoon progress and the budget to be the two important triggers,” said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
Onset of Monsoon is expected to ease prices of food grains, helping RBI to control sticky inflation, experts added. Investors heavily bought oil & gas shares after reports said Government is likely to hike natural gas rates from July 1 after a new price formulation is approved by Cabinet.
The total market value of all the domestic listed companies also surged to a record $1.5 trillion as both Sensex and Nifty surged to their new record highs on Friday. Market-capitalisation (m-cap) of all the listed companies stood at Rs 89,31,898 crore and at rupee’s closing at Rs 59.17 per dollar, the market value stands at $1.5 trillion.
India had first entered the trillion-dollar club in June 2007, but moved out in September 2008, amid the global slowdown. It again got back into the elite league in May 2009 and had largely remained there since then, except for some brief periods including once in 2012. In August 2013, it had, however, slipped out of the elite list.
Meanwhile, domestic currency also rose by 16 paise against dollar on the back of a surge in local equities and hefty capital inflows. Dollar selling by exporters also aided the rupee rise while the dollar index was up marginally, say traders.
Rupee started strong at Rs 59.20 per dollar and later trapped in a narrow breadth of Rs 59.10 per dollar and Rs 59.23 per dollar. This is its biggest single-day gain since 30 paise rise on May 22.Back in Sensex, 24 of 30 counters closed in the green while others finished in the red. ONGC was top gainer with a rise of 10.57 per cent, followed by Gail India 7.52 per cent, Hero MotoCorp 3.68 per cent, RIl 2.97 per cent, HDFC 2.96 per cent, M&M 2.53 per cent and Bajaj Auto 2.31 per cent.
Cipla 2.21 per cent, Dr Reddy’s lab 1.79 per cent, ICICI Bank 1.42 per cent, Axis Bank 1.39 per cent, Wipro 1.34 per cent, SBI 1.31 per cent, HDFC Bank 1.25 per cent, HUl 1.14 per cent and ITC 1.06 per cent also gained handsomely. However, Sesa Sterlite dipped 2.53 per cent, Infosys 1.26 per cent and TCS 1.02 per cent among Sensex laggards.
On the National Stock Exchange (NSE), 20 indices, owned and managed by India Index Services & Products, a subsidiary of NSE Strategic Investment Corporation ltd, closed at record high levels on Friday.FIIs, key drivers of the recent bull run, continued with heavy buying in the equity markets. As per the provisional data provided by the stock exchanges, FIIs bought shares worth Rs 1,283.04 crore on Friday, In the last two sessions alone, FIIs have invested Rs 2,652 crore in the Indian stock markets.