BSE Sensex Hits Record High Above 28,000

The BSE Sensex and Nifty edged higher on Wednesday after earlier hitting a fourth consecutive record high that sent the benchmark BSE index above the 28,000-point mark for the first time, as lenders continued to rally on hopes of early interest rate cuts.

Continued fund flow from overseas investors also lifted sentiment. Foreign investors bought shares worth $900.2 million in the last four consecutive sessions, taking their rally for so far this year to $14.2 billion.

However, gains were capped as metals and mining companies fell sharply tracking weaker global prices, while investors also booked profits as markets across the region were subdued.

Caution also prevailed ahead of a market holiday on Thursday.

"Overall outlook is positive. The investment climate has improved and is expected to be good. And we do expect RBI to cut rates," said Deven Choksey, managing director at KR Choksey Securities.

The Sensex closed 0.2 per cent higher at 27,915.88 points. Earlier, it rose as much as 0.54 per cent to break 28,000 levels and made a fresh record high of 28,010.39, breaching the 27,969.82 level hit in the previous session.

The broader Nifty gained 0.2 per cent to 8,338.30 points. The index gained as much as 0.5 per cent to hit a record high of 8,365.55 points.

Markets were closed on Tuesday for a public holiday.

Banks continued their rally on growing expectations the Reserve Bank of India would cut interest rates as early as its next policy review in December, or, if not, in February.

State Bank of India gained 2.2 per cent, adding to its 0.8 per cent gain on Monday and 4.8 per cent in the last week. ICICI Bank closed up 1.6 per cent while Axis Bank gained 2.9 per cent.

The NSE bank index closed 1.3 per cent higher.

Dr Reddy's Laboratories closed 2.2 per cent higher after Morgan Stanley upgraded the stock to "overweight" from "equal-weight", citing improved outlook.

State-run oil marketing companies also gained with BPCL up 2.2 per cent as international crude prices fell to a four-year low, which according to traders would help improve margins.

Indian Oil Corp closed 1.23 per cent higher, while Hindustan Petroleum Corp Ltd ended up 2.02 per cent.

However, metals and mining companies fell with Sesa Sterlite plunging 4.4 per cent as iron ore prices hit a multi-year low. NMDC Ltd closed down 3.9 per cent.

Ipca Laboratories plunged 10.4 per cent after Credit Suisse downgraded it to "underperform" from "neutral", citing negative USFDA observations.

Copyright: Thomson Reuters 2014