Sensex, Nifty close at record highs as Fed minutes suggest slower rate hikes

Key stock indices Sensex and Nifty rallied over 1 per cent to close at lifetime highs following gains in IT, banking and oil stocks and firm trends in global markets on expectations of slower rate hikes by the US Federal Reserve.

Benchmark BSE Sensex rallied 762.10 points or 1.24 per cent to settle at 62,272.68, its record closing peak, as 26 of its components ended in the green. During the day, it jumped 901.75 points or 1.46 per cent to its lifetime high of 62,412.33.

The broader Nifty of the National Stock Exchange jumped 216.85 points or 1.19 per cent to end at a record high of 18,484.10. As many as 44 of its stocks advanced and six declined. During the day, it hit its 52-week high of 18,529.70, higher by 262.45 points or 1.43 per cent.

In the three-day rally, Nifty rose by over 2 per cent or 324 points while Sensex advanced 1,167 points or close to 2 per cent.

“Two triggers assisted the Sensex rally to record highs. One, in the mother market US, the market construct turned favourable with rising equities, declining bond yields and falling dollar. Two, macro developments in India show steady rise in credit growth and capex indicating strong economic recovery.

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“Along with this, sharp correction in crude is a big positive. This has facilitated this Sensex rally led by large-caps, mainly the HDFC twins, Infosys, TCS and RIL,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

From the Sensex pack, Infosys was the lead gainer with a 2.93 per cent rise. HCL Technologies jumped 2.59 per cent, Power Grid by 2.56 per cent, Wipro by 2.43 per cent, Tech Mahindra by 2.39 per cent and TCS by 2 per cent.

Hindustan Unilever, Reliance, ICICI Bank, HDFC, HDFC Bank and Mahindra & Mahindra were among the major winners.

Bajaj Finserv, Tata Steel, Bajaj Finance and Kotak Mahindra Bank were the laggards.
In the broader market, the BSE midcap gauge rose by 0.52 per cent and smallcap index climbed 0.42 per cent.

Among sectoral indices, IT jumped 2.30 per cent, teck climbed 2.12 per cent, oil & gas (1.25 per cent), financial services (1.03 per cent), capital goods (0.98 per cent), energy (0.92 per cent) and FMCG (0.85 per cent).

Only consumer durables index ended marginally lower.

“Investors wound up their short positions on the expiry day, triggered by US Fed minutes indicating a moderate pace of rate hikes going ahead that eventually propelled benchmark indices Sensex & Nifty to new all-time highs.

“Other positive catalysts such as the WTI crude oil prices staying sluggish and the falling US Dollar index and yields improved the risk appetite of investors leading to a broad-based buying,” said Shrikant Chouhan, Head of Equity Research ( Retail), Kotak Securities Ltd.
Elsewhere in Asia, markets in Seoul, Tokyo and Hong Kong ended in the green, while Shanghai settled lower.

Equity exchanges in Europe were trading in the green in the afternoon trade. Wall Street ended higher on Wednesday.

“Led by broad-based buying, domestic indices witnessed solid gains as investors digested the latest Federal Open Market Committee (FOMC) meeting minutes, which hinted that the rate hike cycle may be slowing down. The optimism was further boosted by falling crude prices and the declining dollar index. Crude oil prices dropped over talks of a possible price cap on Russian oil and a rise in US product stockpiles,” said Vinod Nair, Head of Research at Geojit Financial Services.

International oil benchmark Brent crude was trading 0.46 per cent lower at USD 85.02 per barrel.

Foreign Institutional Investors (FIIs) offloaded shares worth Rs 789.86 crore on Wednesday, as per exchange data.

(With Agency inputs)