Bulls On Rampage: Nifty Soars To 18-Month High, Sensex Up 446 Points
All the sectoral indices were trading in the green Rupee also hit a four-month high of 66.51 against the dollar FIIs have invested $6 billion in Indian markets so far this year
Bulls on the Dalal Street today took Nifty above 8,900 for the first time in 18 months while Sensex surged close to 29,000 levels.
The rupee also hit a four-month high of 66.51 against the dollar.
Stocks have rallied in the backdrop of higher global markets as weak US job numbers in August has subsided fears of an imminent rate hike from the US Federal Reserve. Emerging markets, including India, have been beneficiary of strong inflows from overseas investors in the wake of stimulus measures from global central banks.
"September Fed rate hike talks have been put to rest now. Therefore, this liquidity-driven rally is expected to continue for the time being, which is comforting our markets," said Pankaj Pandey, head of research at ICICI Securities.
Overseas investors have poured nearly $6 billion into Indian markets this year.
The Sensex ended 446 points higher at 28,978 - a 17-month high - after hitting 29,013 at day's high. The Nifty settled 133 points higher at 8,943, its highest close in 18 months.
Despite the June quarter GDP growth slowing down, analysts are hopeful that good monsoon, Seventh Pay Commission awards and key reform measures will help GDP growth to pick up pace in subsequent quarters.
Technical analysts say that with Nifty breaking out of the 8500-8800 range, there could be further upside in the market. Jay Thakkar of Sharekhan said that Nifty could retest record high levels of 9,100 soon.
Analysts also say that new Reserve Bank Governor Urjit Patel is likely to maintain a strong anti-inflationary stance like his predecessor Raghuram Rajan. This has also helped propel gains in the rupee against the US dollar, which has also weakened against other currencies as Fed rate hike expectations wane.
The gains were broad-based today with all the sectoral indices trading in the green. Banking and auto stocks led the rally today. Sentiment in auto stocks has perked up after automakers reported strong August sales numbers.
Among auto stocks, Tata Motors surged 7 per cent while Maruti Suzuki rose 3 per cent. In the banking pack, Axis Bank surged 6 per cent, ICICI Bank rose 4 per cent while Yes Bank gained 3.7 per cent.