Sensex ends above 19,000 as govt readies to unleash new reforms

The government's move to unleash new reforms sent the 50-share Nifty to an 18-month high Thursday. The BSE Sensex closed above the 19,000 mark for the first time since July 7, 2011.

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 rupee, too, hit fresh 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.

Some analysts advised investors to be cautious because the markets have run up too fast.

"The move has been sharper than expected, but that's because there was no action for the last one-and-a-half years... However, investors should have muted expectations from here on," Daljeet Kohli of India Nivesh Securities said.

The Sensex advanced 188 points or 1 per cent while the broader Nifty gained 56 points to 5,788. The Nifty had earlier breached the 5,800 mark for the first time since April, 2011.

Banking stocks drove the rally, rising nearly 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. Private lenders like ICICI Bank and Axis Bank closed with nearly 3 per cent gains.

High beta realty stocks saw strong buying interest. The BSE realty index closed nearly 5 per cent higher. DLF, India's biggest developer, gained over 5 per cent.

Oil marketing companies rose after Brent futures declined. Hindustan Petroleum and BPCL both closed with over 3 per cent gains.

On the Nifty, 35 of the 50 stocks traded higher. State-run heavy equipment manufacturer BHEL was the top gainer, up 6.5 per cent. Infra major Jaiprakash Associates jumped 4 per cent.

Drug makers Lupin and Cipla were among the top losers on the Nifty, both falling 3-4 per cent. Defensive stocks lose charm amid risk-on trade. Among other stocks, two-wheeler major Hero MotoCorp extended losses after weak sales in September.


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 turned lower after a firm opening.


(With inputs from Thomson Reuters)