Mumbai: The Budget rally entered the second day on Thursday after the Sensex closed near a four-month high of 28,227, underpinned by healthcare and IT stocks amid mixed global shares. Apart from auto, capital goods and infra, all sectoral indices notched up smart gains. After moving between 28,070.81 and 28,299.92, the Sensex settled up 84.97 points, or 0.30%, at 28,226.61.
This is the highest closing since 4 October last when it closed at 28,334.55. The index had rallied 486 points yesterday, spurred by a series of market-friendly budget moves. The 50-share NSE Nifty finished higher by 17.85 points, or 0.20%, at 8,734.25 after trading between 8,685.80 and 8,757.60.
“The turnaround in IT and pharma stocks and the weakness in the dollar after an unchanged US Fed policy have given some impetus to the market," said Vinod Nair, head of research, Geojit BNP Paribas Financial Services.
The rupee closed higher at 67.37 after the US Fed decided to keep rates unchanged and struck a cautious tone about policy tightening. Market stayed in a tight range during the first half due to profit-booking after Wednesday’s sharp rally and a weak trend in Asia, but revival in buying interest among domestic institutional and retail investors led stocks higher.
The Budget’s significant allocation to infrastructure and focus on affordable housing, rural development and agriculture contributed to the rally. Coming up next is RBI’s monetary policy next week which is being closely tracked by investors. Software stocks such as Infosys, TCS and Tech Mahindra were back in demand as they gained by up to 2.85%.
Drug major Dr Reddy’s walked away with top honour by jumping 3.31% followed by Sun Pharma (2.64%).
Overall, 15 scrips out of 30 Sensex stocks ended higher. However, some like Hero MotoCorp, M&M and Tata Motors in the auto sector faced selling following disappointing January sales numbers. Foreign portfolio investors (FPIs) net bought shares worth Rs92.73 crore while domestic institutional investors (DIIs) lapped up shares worth a net Rs1,133.74 crore on Wednesday, as per provisional data.
Buying by retail investors continued in broader markets, helping the small-cap and mid-cap indices gain up to 0.95%. Among the BSE sectoral indices, consumer durables gained the most by 2.18%, followed by healthcare 1.79%, IT 1.78% and technology 1.68%.
Other Asian markets showed a weak trend, with Hong Kong’s Hang Seng ending 0.61% lower and Nikkei losing 1.22%. European markets were in a mixed shape in their early trade, with Frankfurt rising 1.08% and London’s FTSE down 0.11% Paris CAC 40 shed 0.23%.