Sensex hits record intra-day high at 40,390 pts; IT stocks up

Mumbai: A massive inflow of foreign funds on the back of positive global cues along with expectations of further economic reforms like reduction in certain taxes and healthy quarterly results lifted the S&P BSE Sensex to touch a new intra-day record high of over 40,300 points on Thursday.

The Sensex touched a record intra-day high of above 40,392 points, surpassing the previous high of 40,312 reached on June 4, 2019.

Late Wednesday night, the US Federal Reserve had reduced interest rates for the third time this year in a move to ensure the US economy weathers a global trade war without slipping into a recession.

This reduction, analysts said aided in the healthy fund inflows into the Indian equity markets. BSE data on Thursday showed that foreign institutional investors (FIIs) bought shares worth a net of Rs 1,870.87 crore.

Healthy buying was observed in IT, telecom, realty and healthcare stocks, whereas the scrips of metal and capital goods companies came under heavy selling pressure.

The S&P BSE Sensex closed at 40,129.05 points, up 77.18 points, or by 0.19 per cent, over the previous close of 40,051.87 points.

After opening at 40,211.99 points, the Sensex swayed between an intra-day high of 40,392.22 and a low of 40,054.89.

Similarly, the Nifty50 of the National Stock Exchange closed at 11,877.45, higher by 33.35 points, or by 0.28 per cent over its previous close.

The broad market indices like the BSE Mid-cap and Small-cap indices gained more, thereby outperforming both the Sensex and Nifty.

“Market is slowly marching towards the all-time high supported by quarter earnings and government measures to attract equity investments,” said Vinod Nair, Head of Research, Geojit Financial Services.

“Additionally, strong economic factors like favourable inflation, interest rate and benign oil prices will support the market sentiment in the long term. Strengthening rupee, along with increasing FIIs inflow, is indicating a change in FIIs’ negative stance towards emerging markets.”

According to Motilal Oswal Financial Services Private Retail Research Head Siddhartha Khemka: “Sensex drifted to 36,000 zones in the mid of September but witnessed good recovery in the last two months led by FIIs flow, positive momentum from US indices, reducing tension over US-China trade war,”

“In October, FIIs have bought nearly $700 million in equities, while so far this year they have purchased $8.87 billion. Moreover, impressive corporate earnings and reports that the government is considering further tax reforms also boosted sentiments. Moreover, turnaround of auto sales volumes in the festival sessions, good monsoon, stable oil price and USD-INR added fuel in the market.”

HDFC Securities’ Retail Research Head Deepak Jasani said: “Technically, the short term uptrend of the Nifty still remains intact. Further upsides are likely once the immediate resistance of 11,947 is taken out, in which case 11,982 will be the next resistance.”

“Crucial supports to watch for resumption of weakness are at 11,785.”