BackSensex, Nifty scale new highs as RBI keeps rates unchanged
Sensex rose as much as 0.44% to an all-time high of 22,485.77, while Nifty gained 0.41% to a record high of 6,732.25
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Mumbai: The BSE Sensex and Nifty rose to a record high for a seventh consecutive session as blue chips such as Larsen & Toubro Ltd. (L&T) extended a rally after the Reserve Bank of India (RBI) left interest rates unchanged and said it did not expect policy tightening in the near-term.
The RBI has raised the repo rate by 75 basis points since September to contain high inflation, but analysts had expected the central bank would keep rates steady ahead of general elections and an uncertain economic growth outlook.
India’s record-setting share rally has been sparked by heavy foreign buying—reaching a $3.3 billion in March—as analysts cite expectations of a recovery in the domestic economy, and bets that main opposition Bharatiya Janata Party (BJP), perceived as more business-friendly, will come to power.
However, analysts warn momentum could eventually wane, with investors on Tuesday also booking profits in recent outperformers such as banks. Data on Tuesday showed manufacturing activity grew at a slower pace in March as weaker domestic demand dragged on output growth.
“We continue to believe that till the election result is clear, index will remain in the sidelines and bulk of the action will be witnessed in mid and small caps," Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.
Profit booking in banking stocks is only a near-term phenomenon, added Nair.
The BSE Sensex rose as much as 0.44% to an all-time high of 22,485.77, while Nifty gained 0.41% to a record high of 6,732.25.
Sensex ended 0.27% higher while Nifty ended up 0.25%.
Among blue chip stocks, L&T gained 0.6%, while Tata Consultancy Services Ltd. (TCS) rose 2%.
Reliance Industries Ltd. (RIL) rose 1.3% and Tata Motors Ltd. ended 1.1% higher.
Mahindra and Mahindra Ltd. (M&M) gained 2% after the company said its domestic tractor sales rose 7% to 16,571 tractors in March.
Kalpatru Power Transmission Ltd. rose 2.3% after the company on Monday said it had received new orders of over Rs700 crore.
Still, investors also took profits on recent outperformers such as Hindalco Industries Ltd., which fell 2.5% on profit taking after rising 8.3% on Monday.
Punjab National Bank ended down 1% after being the best performer of the NSE in March with a 35% rally.
Among other stocks that fell, Natco Pharma Ltd. fell 14.22%, after the US Supreme Court on Monday agreed to hear an appeal filed by Teva Pharmaceutical Industries Ltd. in a patent fight over top-selling multiple sclerosis drug Copaxone. Reuters
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