Nifty hits 18-month high of 5800 on reform hopes

The 50-share Nifty hit a 18-month high Thursday as the strong momentum in stocks continued unabated Thursday. Positive global cues helped bullish sentiments.

The strong rally was on hopes that the cabinet may approve bills that would raise the cap on foreign direct investment in insurance firms and open the pension sector to foreign investors later today. The BSE Sensex rose above the 19,000 for the first time since July 15, 2011 while the broader Nifty hit the 5,800 mark for the first time after April 29, 2011. Earlier, the rupee hit a five-and-half month high against the dollar.

Equity markets have witnessed sharp gains in September on account of strong liquidity flows, which have also supported the rupee. Indian markets received over $3.5 billion net purchases last month. The government's recent moves to open up various sectors for foreign investment and focus on fiscal consolidation have helped sentiments on the Street.

"Reforms are in an overdrive and I don't see any roadblocks... 5,900 looks possible in a week and markets may hit a new high early next year," Ambareesh Baliga of Way2Wealth told NDTV Profit.

At 1 p.m., the Sensex traded 218 points or 1.1 per cent higher at 19,087 while the broader Nifty advanced 69 points to 5,800.

Banking stocks drove the rally, rising over 2 per cent. Financial companies with insurance units surged. Max India shares hit their highest since December 2009 while Bajaj Finserv gained hit a record high.

High beta realty stocks saw strong buying interest. The BSE realty index traded with over 4 per cent gains. DLF, India's biggest developer, was up over 4 per cent.

Oil marketing companies rose after Brent futures declined. Hindustan Petroleum advanced over 5 per cent. BPCL gained 4.5 per cent.

On the Nifty, 39 of the 50 stocks traded higher. State-run heavy equipment manufacturer BHEL was the top gainer, up 6 per cent. Private lenders ICICI Bank and Axis Bank gained over 3 per cent. Infra major Jaiprakash Associates was the other stock that traded 3 per cent higher on Nifty.

Drug makers Lupin and Cipla were among the top losers on the Nifty. Defensive stocks lose charm amid risk-on trade.


Global cues:

Japan's Nikkei share average closed with 0.9 per cent gains as robust U.S. economic data and a softer yen offset weakness in technology shares on concerns over dwindling profits. European shares opened in the green.


(With inputs from Thomson Reuters)