Sensex closes at 3-yr high above 21,000

 Key benchmark indices on Wednesday closed a record high on the back of general bullish sentiment fuelled by the RBI’s action in its second quarter monetary review on Tuesday, while on the other hand, global stocks rallied on hopes that the US Federal Reserve will stay on course with its $85 billion monthly asset purchase programme at its 2-day meeting ending later in the day.

The popular BSE Sensex closed above the 21,000 mark for the first time since November 2010.

Also, the momentum continued for the second straight day post RBI’s decision to cut the Marginal Standing Facility (MSF) rate — which eases liquidity in the system by lowering cost of borrowing for banks — bringing cheers to Dalal Street.

The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Tuesday as FIIs bought shares worth a net Rs 1167.70 crore, as per Sebi data, which takes the total foreign fund flows to nearly Rs 15,000 crore during the period.

With another trading day left in October, both the premium indices of BSE and NSE registered their biggest monthly gains in percentage as well as in absolute terms, on back of strong fund flows from the overseas investor. The BSE Sensex closed up 104 points or 0.44 per cent higher at 21,033.97 points, while the NSE Nifty closed 30 points higher at 6,251.70 points.

The Sensex was 184 points away from its intraday high of 21,206.77. Although BSE Sensex hit the 21,000 mark on many occasions in the past, it last closed above the mark only on November 5, 2010. 

So much so, the Sensex is now just 172.8 points short of its record high of 21,206.77 witnessed in January 2008 at the peak of the bull run before the global financial crisis. Dealers said the ongoing rally continues to be driven by liquidity and technical factors ahead of the derivatives expiry on Thursday.