Benchmark indices extended their gains for the fifth straight session today with the Sensex closing above 40,000 for the second consecutive day on the back of rally in IT and consumer durables stocks. During the day, the index hit its all-time high of 40,392, surpassing its previous record high of 40,312 on June 4. Nifty, too, gained steam but fell short by 176 points from the record high of 12,103 hit on June 3. Sensex has gained 1,109 points in last five sessions and Nifty has climbed 295 points during the period.
With the indices clocking huge rally, investors have become richer by Rs 4.82 lakh crore in last five sessions. On October 25, BSE market capitalisation stood at Rs 149.26 lakh crore which rose to Rs 154.09 lakh crore today. While Sensex settled 77.18 points, or 0.19 per cent, higher at 40,129.05 in trade today, Nifty advanced 33.35 points, or 0.28 per cent, to close at 11,877.45.
On Wednesday, Sensex rose 220 points to end at 40,051, making it the third time the index closed above 40,000 in 2019. Nifty gained 57 points to 11,844 that day. On June 4, Sensex closed at 40,083 ending above 40,000 for the second time in 2019. On June 3, Sensex closed at 40,267.
Back to today's market action, YES Bank was the top gainer on Sensex and Nifty, rising 24 per cent, after the lender said it received a binding offer for $1.2 billion (approximately Rs 8,500 crore) funding from an overseas investor.
During the day, the large cap stock zoomed 34.97% to Rs 76.65 compared to the previous close of Rs 56.80 on BSE. On Nifty, YES Bank share price rose nearly 35% intra day to Rs 78.70 against previous close of Rs 56.80. The large cap stock closed 24% or 13.65 points higher at Rs 70.45 on BSE. On NSE, the stock ended 23.77% higher at Rs 70.30.
Other Sensex gainers were SBI (7.69%), Infosys (3.79%), Tata Motors (3.40%), Bharti Airtel (1.67%), HCL Tech (1.50%) and HDFC (1.30%).
SBI share price closed 7.69% or 22.30 points higher at 312.25 on BSE after analysts gave thumbs up to the lender's strong Q2 earnings as it set off losses from one-time gain of Rs 3,500 crore from the sale of 4.5% stake in its life insurance arm. The lender also raised provisions coverage to more than 80 per cent, the highest in more than a decade.
Manav Chopra, head research (Equity) at Indiabulls Ventures said, "Bulls continue to march ahead pushing the index higher. Market breadth has been the focal point as mid and small caps join the party. We have held our bullish stance even on down phase and have recommended going long on declines which have worked well. We continue with our bullish stance and believe index is headed for new highs soon. 11,600 is the immediate downside support for Nifty."
Of 30 Sensex stocks, 17 ended in the green. Tech Mahindra (2.08%), Tata Steel (1.95%) and ICICI Bank (1.74%) were the top Sensex losers. On Nifty, top gainers were YES Bank (23.77%), Zee Entertainment (10.78%) and SBI (7.80%).
Top Nifty losers were JSW Steel (2.85%), Indian Oil (2.14%) and Tata Steel (2.06%). On BSE, 246 scrips hit their upper circuit compared to 221 falling to their lower circuit in today's trade.
Meanwhile, mid cap and small cap indices closed 167.35 points and 126 points higher today. Consumer durables, IT and healthcare stocks led the gains with their BSE indices rising 144 points , 264 points and 121 points, respectively.
Gaurav Dua, senior vice-president, head - capital market strategy and investments, at Sharekhan said, "Sensex hit its record intra-day high on the back of positive factors including decent Q2 results, boost to consumer demand in the festive season and policy push by the government to support the economy."
A massive spike in foreign fund inflows and hopes that the government will rejig taxes on equity investors too boosted investor sentiment, traders said.
Foreign institutional investors pumped in a net Rs 7,192.42 crore into the capital market on Wednesday, while domestic institutional investors sold shares worth Rs 185.87 crore.
Sanjiv Bhasin, Director at IIFL Securities said, "We are in a bull market. The economy is coming back on track and we are clearly overdone on consumption pessimism. The cut in tax rate is also boosting market sentiment. And, with its ambitious disinvestment plan, the government has set the cat among the pigeons."
The US Federal Reserve's decision to cut its benchmark interest rate for the third straight time also buoyed market mood. However, benchmark indices turned volatile in the last hour of the session as October futures and options contracts expired, traders said.
Market breadth was positive with 1,517 stocks ending higher compared to 1,041 closing lower on BSE. 147 stocks were unchanged. The Indian rupee depreciated 12 paise to 71.02 against the US dollar intra-day.
Most Asian stock markets followed Wall Street higher today after the Federal Reserve cut a key interest rate. Tokyo, Hong Kong and Seoul advanced. Shanghai retreated 0.1% after Chinese factory activity weakened more than expected in October. Investors welcomed the Fed's third rate cut this year to shore up economic growth amid a bruising US-China trade war.
The Fed indicated it won't cut rates again unless the outlook worsens. Tokyo's Nikkei 225 rose 0.4% to 22,932.27 and Hong Kong's Hang Seng gained 1% to 26,948.79. South Korea's Kospi added 0.4% to 2,090.45.
On Wall Street, the benchmark S&P 500 rose 0.3% to 3,046.77, hitting a record for the second time this week. The Dow Jones Industrial Average gained 0.4% to 27,186.69. The Nasdaq composite added 0.3% to 8,303.98. With its latest rate cut, the Fed has nearly reversed four rate hikes made in 2018.
By Aseem Thapliyal