Sensex closes past 32,000 for the first time on RBI rate cut chances
Mumbai: The BSE Sensex on Thursday went past the 32,000-mark for the first time ever soaring over 232 points and the Nifty closed at a new peak 9,892 as inflation hit a record low, offering the Reserve Bank of India (RBI) leeway for a policy rate cut.
The 30-share BSE index took 33 sessions to rise 1,000 points before it finally went beyond the psychologically significant 32,000. Higher Asian and European stocks provided fodder after US Federal Reserve chair Janet Yellen, in a House testimony, signalled that the approach to higher rates will be steady, prompting investors to buy more in India.
Retail inflation for June hit a historically low 1.54% and industrial growth, measured by Index of Industrial Production (IIP), slumped to 1.7% for May, boosting chances of a rate cut by RBI at its upcoming August policy meet. The macro numbers were released after market hours on Wednesday.
The BSE Sensex settled at a new peak of 32,037.38, up 232.56 points, or 0.73%. It surpassed its previous record of 31,804.82 achieved Wednesday. In past four days, the index had gained 676.75 points.
The broader 50-issue NSE Nifty spurted 75.60 points, or 0.77%, to close at fresh lifetime high of 9,891.70, bettering its earlier record 9,816.10 hit Wednesday.
Both indices rose for the fourth consecutive session.
ITC Ltd emerged as the top gainer by rising 3.03%. Bharti Airtel Ltd, ICICI Bank Ltd and Sun Pharmaceutical Ltd rose up to 1.84%. The largest IT exporter, TCS, firmed up 0.20% ahead of its June quarter results declared Thursday.
Traders said ample liquidity in the market is driving the current phase of the rally amid optimism over earnings from blue-chip companies. Consumer goods and banking stocks had a good day. The FMCG index rose the most by surging 1.58%, followed by capital goods and banking.
Foreign investors have been supporting the ongoing rally by pumping in sizeable money into domestic markets. Foreign portfolio investors (FPIs) bought shares worth a net Rs361.25 crore on Wednesday while domestic institutional investors (DIIs) sold shares worth a net Rs330.58 crore, showed provisional data. Buying activity also rubbed off on broader markets, with mid-cap and small-cap indices ruling up.
- WEF ranks India at 62nd place on Inclusive Development Index
- South Koreans burn Kim Jong Un’s photo as North Korean band leader passes
- WEF 2018: Time for India to be a statesman, not just salesman, says Uday Kotak at Davos
- CPI yet to decide on tie-up with Congress, will discuss with CPM: Suravaram Sudhakar Reddy
- FMCG firms want Union budget to focus on rural wages, job creation