India’s benchmark indices continued their upward momentum, with both the Sensex and Nifty reaching record highs for the sixth consecutive session on Thursday, driven by gains in auto and banking stocks.
The Sensex surged 666.25 points, or 0.78 percent, to close at 85,836.12, while the Nifty added 211.80 points, or 0.81 percent, to settle at 26,216.
Market breadth was mixed, with 1,603 shares advancing, 2,200 shares declining, and 102 remaining unchanged.
Among the top performers on the Nifty were Maruti Suzuki, Tata Motors, Shriram Finance, Grasim Industries, and M&M. In contrast, shares of ONGC, Cipla, NTPC, Hero MotoCorp, and L&T were among the worst performers.
Sector-wise, the auto and metal indices each gained 2 percent, while FMCG and PSU Bank indices rose 1 percent. However, the capital goods index dipped by 0.6 percent.
The BSE Midcap index ended the day flat, and the Smallcap index declined by 0.4 percent.
The US Federal Reserve’s decision to loosen interest rates by a steep 50 basis points has provided fresh momentum to Indian stocks. A reduction in US rates typically encourages capital flows to markets with higher policy rates.
With a more pronounced rate cut in the US, there is a greater inclination for capital to seek alternative investment destinations, including India.
The ongoing buying by foreign portfolio investors (FPIs) has also contributed to the positive movement in stock indices. FPIs have increased their investments in India, drawn by the prospect of better returns due to the difference in interest rates.
Data from NSDL shows that FPIs have purchased Rs 49,459 crore worth of Indian stocks in September alone. This marks the fourth consecutive month of net buying by these investors.
“There are no immediate near-term triggers that can take the market sharply up or down. Up moves may attract selling by FIIs who are likely to move some more money to China and Hong Kong since these markets are cheap and are witnessing an uptrend now. But FII selling is unlikely to push the market down significantly since the ample domestic liquidity can easily absorb such selling,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
“Since there is no valuation comfort in the market now and the mid and smallcap segments are overvalued, investors should give priority to safety and prefer largecaps. Bank Nifty has more potential to move up and there is valuation comfort in this space,” Vijayakumar added.
(with ANI inputs)