Sensex, Nifty hit new highs on policy reforms hope

Extending their record-breaking show, benchmark indices Sensex and Nifty on Friday hit new life-time highs and ended about 1.5 per cent up as southwest monsoon set in and hefty overseas inflows continued, buoyed by hopes of policy reforms by the new government.

Besides, a firming trend overseas after European Central Bank announced stimulus measures , accelerated fund flows into emerging markets like India bouyed sentiments, brokers said.

Intra-day, the BSE Sensex rallied to an all-time high of 25,419.14, surpassing previous high of 25,375.63. It closed at a new high of 25,396.46, logging a gain of 1.51 per cent or 376.95 points-its best single-day rise in over three weeks.

The Sensex's previous all-time intra-day high of 25,375.63 was hit on May 16, the day election results showed the BJP had clinched a landslide victory in Lok Sabha polls.

Nine of the twelve of the sectoral indices ended in the green. Realty, oil&gas and banking shares led the surge.

The NSE Nifty touched a new life high of 7,592.70, breaching the earlier high of 7,563.50. It closed up 109.30 points, or 1.46 per cent, to end at new high of 7,583.40.

The Nifty's previous all-time intra-day high of 7,563.50 was also hit on May 16.

"Oil ministry is likely to take decision on gas pricing by month-end, generating renewed buying in the sector. Positive news about Monsoon also boosted market sentiment," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.

Onset of Monsoon is expected to ease prices of food grains, helping RBI to control sticky inflation, say experts.

Investors heavily bought oil and gas shares after reports said the government is likely to hike natural gas rates from July 1 after a new price formulation is approved by the Cabinet. Among Sensex, ONGC shot up nearly 11 per cent and RIL gained about 3 per cent. GAIL stock rose 7.5 per cent.

Of the 30 Sensex scrips, 24 ended higher, while six led Infosys, Hindualco, Sesa Sterlite, Bharti Airtel, Tata Consultancy Services and Coal India ended lower. Shares of Infosys fell 1.28 per cent following exit of a key executive.

Sectorwise, BSE realty index gained the most by rising 5.02 per cent, followed by Oil and gas index up 4.82 per cent and Banking index that jumped 1.65 per cent.

Similarly, the wide-based 50-issue CNX Nifty of the NSE also jumped 109.30 points or 1.46 pct to end above 7,500-mark for the first time to 7,583.40.

Asian stocks closed mixed with downward bias. Key indices from Japan and Singapore closed with gains while from China, Hong Kong, South Korea and Taiwan finished with losses.

European markets, however, were trading better in their late morning deals. The CAC was up by 0.07 pct, the DAX by 0.20 pct and the FTSE by 0.26 pct. US stocks rose to records on Thursday as European Central Bank stimulus boosted optimism in the global economy before US jobs report.

Mr. Jignesh Chaudhary, Head of Research, Veracity Broking Services said," Positive sentiments in the market has boosted the confidence as Modi after taking the charge of PM has taken some vital issues in hand in a constructive way with a the concrete decision has spread a sense of hope in the mind of investors that India will grow on good pace."

Overall, 24 out of 30 Sensex-based counters closed in the green while others finished in the red.

ONGC was the top gainer with a rise of 10.57 pct followed by Gail India 7.52 pct, Hero MotoCorp 3.68 pct, RIL 2.97 pct, HDFC 2.96 pct, M&M 2.53 pct, Bajaj Auto 2.31 pct, Cipla 2.21 pct, Dr Reddy's Lab 1.79 upct, ICICI Bank 1.42 pct, Axis Bank 1.39 pct, Wipro 1.34 pct, SBI 1.31 pct, HDFC bank 1.25 pct, HUL 1.14 pct and ITC 1.06 pct while SSLT dipped by 2.53 pc, Infosys 1.26 pc and TCS 1.02 pc.

Among the S&P BSE sectoral indices, Realty rose by 5.02 pct followed by Oil&Gas 4.82 pct, Bankex 1.65 pct, CD 1.61 pct, Auto 1.53 pct, HC 1.39 pct and FMCG 1.30 pct.

Small-cap and Mid-cap indices also rose by 1.56 per cent  and 1.59 per cent respectively due to persistent buying by retailers.