Shy of just 560 points from its all-time high, Sensex on Thursday breached the critical level of 20,000 and closed after gaining 685 points at 20,646.64.
Over six years back on January 10, 2008 Sensex touched an all time high of 21,206.77. It is the same story for the broader index Nifty which rose by 216.10 points to 6,115.55, 241 points below its all time high of 6,357.10 which it made on January 8, 2008. It seems that the Indian stocks markets gave a standing ovation to Federal Open Market Committee’s (FOMC) decision to delay the winding down of its $85 billion bond buying programme.
Experts said that the heavy buying was seen in the interest sensitive sectors as most of investors feel that after US Fed’s decision to leave economic stimulus untouched would give Reserve Bank of India more room to ease its monetary policy on September 20. Investors got richer by Rs 1.84 lakh crore. Thursday’s gains are the biggest since September 10 when Sensex surged by 727 points. As per the provisional data given by stock exchanges, FIIs invested Rs 3,543.84 crore in the Indian markets.
Out of 30 stocks comprising the Sensex, 28 stocks closed with gains while on Nifty 47 out of 50 stocks ended in green. The rally was backed by bank and real estate indices which rose by 6.78 per cent and 5.34 per cent respectively. Apart from them, capital goods index climbed by 4.75 per cent while metal, public sector and FMCG indices closed after rising over 3 per cent. Out of the 13 sector indices on BSE, 12 indices closed in green leaving information technology index which fell by 0.20 per cent.
Banking and rate-sensitive stocks got support from investors ahead of the Reserve Bank of India’s mid-quarter monetary policy meeting tomorrow. Rajan, who took over as RBI Governor earlier this month, rescheduled his much-anticipated first monetary policy statement by a few days to September 20, keeping in mind the two-day Fed meeting.
Foreign institutional investors bought shares worth a net Rs 580.13 crore on Wednesday, according to provisional data from the stock exchanges.13 stocks comprising the bank index gained the most lead by Yes Bank which closed 22.54 per cent up followed by Union Bank and PNB which rose by 10.03 per cent and 9.18 per cent respectively. SBI, Kotak Mahindra Bank, BoB, Canara Bank and Bank of India gained over 8 per cent.
From the 30-Sensex constituents, 28 stocks saw rise, with SBI leading the pack, surging 8 per cent. In the process, the investor wealth rose by a whopping Rs 1.83 lakh crore to Rs 66.53 lakh crore. Analysts said market sentiment turned extremely bullish on a flurry of buying by funds driven by strengthening rupee and a firming global trend after the US Federal Reserve surprised markets by sticking to its massive bond-buying programme.
“Nifty opened on a bullish note following the outcome of US Federal Reserve meeting, in which it put on hold the decision to taper stimulus programme and continue with its bond-buying plan per month as before. For the investors this came as a pleasant surprise and strong buying was witnessed in rate sensitive sectors like banking and realty,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio. As many as 62 stocks touched their 52-week high, while 113 scrips hit their one-year low level. Overall, 1,430 stocks rose, while 997 scrips tanked on BSE.
Indian markets were also accompanied by other Asian as well as European markets in this rally. While Nifty rose the most in Asia by 3.66 per cent, Japanese Nikkei, Honk Kong’s Hang Shang and Singapore’s Straits Times also gained up to 1.8 per cent. On the European front, England’s FTSE and Germany’s DAX, both were up over 1 per cent followed by France’s CAC which was trading with gains of nearly at 0.9 per cent.