The Indian equities market’s benchmark indices, Sensex and Nifty, scaled new peaks on Wednesday, extending the rally for the third consecutive day, as onset of the monsoon and narrowing current account deficit boosted investors’ sentiments.
Investors have become wealthier by more than Rs 3 lakh core in the last three sessions. The 30-stock benchmark Sensex of the BSE surged past the 64,000-points mark for the first time. The index hit a high of 64,050.44 points in the intra-day. The Nifty 50 of the NSE crossed the 19,000 points mark for the first time ever. It hit a high of 19,011.25 points in the day’s trade.
The Sensex closed 499.39 points or 0.79 per cent higher at 63,915.42 points. The Nifty 50 ended the day at 18,972.10 points, which is 154.70 points or 0.82 per cent higher from its previous day's close.
The onset of the monsoon in most parts of the country, narrowing current account deficit and announcement of the effective date for merger of HDFC Bank and HDFC, are the key factors that have boosted investors’ confidence.
“After multiple attempts, the domestic market successfully managed to sustain record high levels, thanks to the increased buying interest in heavyweight stocks,” said Vinod Nair, head of research at Geojit Financial Services.
The market's bullish momentum was further supported by strong FII inflows and a narrowing current account deficit, both of which positively impacted investor sentiments, Nair added.
Foreign institutional investors have been one of the main driving forces behind the recent rally in Indian equities. FIIs have poured in over $3 billion into the Indian equities markets so far in June.
India's current account deficit narrowed to $1.3 billion or 0.2 per cent of the GDP in January-March 2023 quarter from $16.8 billion or 2 per cent of the GDP recorded in the previous quarter, as per data released by the RBI on Tuesday. Positive development on the current account deficit, an important tool to measure the health of the country’s economy, boosted investors’ sentiments.
There was broad-based buying support. Only six out of the 30 scrips that are part of the benchmark Sensex closed in the red. Out of the 50 stocks that are part of the Nifty, 42 registered gains.
HDFC duo continued their rally as the effective date for their mergers nears. The tentative effective date of merger of the two financial giants is July 1. HDFC Bank rallied 1.11 per cent to Rs 1676.40. HDFC closed 0.62 per cent higher at Rs 2779.65.
“Sheer buoyancy of stock prices even in the broader markets made several seasoned investors waiting on the sidelines for a meaningful correction mere spectators,” said S Ranganathan, head of research at LKP securities.
Tata Motors — 2.38 per cent higher at Rs 586.70; Sun Pharma — 2.07 per cent higher at Rs 1022.40; NTPC — 1.80 per cent higher at Rs 189.35; Titan — 1.64 per cent higher at Rs 3024.95; L&T — 1.41 per cent higher at Rs 2421.55 and IndusInd Bank — 1.39 per cent higher at Rs 1334 were among the major Sensex gainers. The index heavyweight Reliance Industries Limited surged 1.34 per cent to Rs 2529.35.
Tech Mahindra fell 0.93 per cent to Rs 1109. Mahindra & Mahindra, Bajaj Finserv, Kotak Bank, Wipro and HCL Technologies also closed in the red.