Sensex, Nifty hit fresh closing highs: Top reasons

Bajaj Finserv, L&T, HDFC, Axis Bank, SBI and Reliance were the top gainers in the sensex pack. (Representative image)

NEW DELHI: Equity indices scaled to record highs on Thursday with the benchmark BSE sensex rising over 950 points led by gains in realty and banking stocks.
After scaling a fresh intra-day high of 59,957, the 30-share BSE index finished 958 points or 1.63 per cent higher at new record of 59,885. While, the broader NSE Nifty settled 276 points or 1.57 per cent higher at fresh peak of 17,823.
Bajaj Finserv, L&T, HDFC, Axis Bank, SBI and Reliance were the top gainers in the sensex pack rising as much as 4.51 per cent.
Whereas, Dr Reddy’s, ITC, Nestle India and Bharti Airtel were the only losers falling up to 1.09 per cent.
On the NSE platform, sub-indices Nifty Realty, Bank and Financial Services gained as much as 8.66 per cent.
Here are the top reasons behind today’s surge:
* Metal, banking, realty stocks surge
Metal, banking and realty shares led the stock market surge as investors took cues from a positive global market.
Metal stocks advanced 1.65 per cent, with Coal India topping the Nifty 50 index as the stock jumped 3.33 per cent.
Banks recouped previous session’s losses to advance 2.24 per cent, with Axis Bank rising over 3 per cent.
Real estate stocks jumped as much as 8.66 per cent to their highest in nearly 11 years, with Godrej Properties surging 12.61 per cent to hit a record high.
The positive sentiment from signs of an increase in property sales is also spilling over to auxiliary sectors, SMC’s Purohit told news agency Reuters, adding private banks with exposure to property mortgage also stood to benefit.
* Federal Reserve announcements
Investor sentiment was boosted by the US Federal Reserve’s outcome.
The Federal Reserve chair Jerome Powell said the Fed plans to announce as early as November that it will start to taper its monthly bond purchases, should the job market maintain its steady improvement.
According to experts, domestic equities look to be good as of now. Favourable outcome from FOMC meeting and visible ease of rising concerns from possible defaults from Evergrande should essentially offer comfort to global markets.
“Powell indicated that the Central Bank may announce a pullback of its asset purchase programme in the November policy meeting and could start to raise interest rates in 2022, which was largely expected by markets.
“In our view, investors may continue to take comfort out of the FOMC meeting in the context that there is no final time frame yet to cut or stop asset purchase programmes,” Binod Modi Head-Strategy at Reliance Securities told news agency PTI.
* Evergrande to put small investors first
Visible ease of rising concerns from possible defaults by Evergrande Group also provided some comfort to the domestic markets.
China’s Evergrande Group will make it a top priority to help retail investors redeem their investment products, its chairman said, as uncertainty looms over a bond interest payment the indebted property developer is due to make on Thursday.
The developer said it had resolved a coupon payment on a domestic bond, pushing the company’s stock price to its biggest single-day percentage rise in a year.
The company, China’s second-biggest property developer, has $83.5 million in dollar-bond interest payments due on Thursday on a $2 billion offshore bond and a $47.5 million dollar-bond interest payment due next week.
Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates.
* Positive global cues
US stocks finished sharply higher in the overnight session after the Federal Reserve’s decision to keep its massive $120 billion monthly asset purchase programme intact to support the economy.
Asian markets rose as concerns about a collapse of troubled property giant Evergrande receded for now.
Hong Kong was among the lead advancers as it reopened after a midweek break to catch up with news that Evergrande had agreed a plan to repay interest to its domestic bondholders, soothing worries of a default that have raised talk of a hammer blow to the Chinese economy.
Bourses in Shanghai and Hong Kong ended with gains, while European stocks rallied for a third day as global sentiment improved.
(With inputs from agencies)


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