Bharti Airtel, Axis Bank, Tata Steel, Titan, Bajaj Finance and Maruti were the top gainers in the sensex pack. (Representative image)
NEW DELHI: Equity indices surged to fresh highs on Monday with the benchmark BSE sensex rising over 750 points led by gains in auto and metal stocks.
After scaling to a fresh intra-day high of 56,958, the 30-share BSE sensex finished 765 points or 1.36 per cent higher at record high of 56,890. While, the broader NSE Nifty settled 226 points or 1.35 per cent up at new peak of 16,931.
Bharti Airtel, Axis Bank, Tata Steel, Titan, Bajaj Finance and Maruti were the top gainers in the sensex pack rising as much as 4.44 per cent.
Whereas Tech Mahindra, Nestle India, Infosys and TCS were the only losers falling up to 1.88 per cent.
On the NSE platform, sub-indices Nifty Metal, Auto, Bank, Realty gained as much as 2.47 per cent.
Here are the top reasons behind today’s surge:
* Rally in metal, auto stocks
Aluminium and copper producer Hindalco Industries and automaker Tata Motors were among the top performers on the Nifty 50 index, rising more than 2 per cent each.
Auto parts suppliers Bharat Forge, Sona BLW Precision Forgings, and Sandhar Technologies jumped 6.2 per cent-13.7 per cent after reports that the US electric-car maker Tesla Inc was in talks with at least three local companies to source critical electronic, electrical and mechanical components as part of its plans to enter the Indian market.
* US Federal Reserve’s dovish stance
Market sentiments were broadly supported by Federal Reserve chair Jerome Powell’s signal that the US central bank would remain patient in winding down its stimulus.
Powell affirmed US economic recovery and explained why there is no rush to tighten monetary policy. He gave a detailed account of why he regards a spike in inflation as temporary and offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be this year.
“Sentiment is extremely bullish and there is a possibility of hitting more records highs. There was a little bit of apprehension on the Fed’s stance but that is now out of the way. So, we expect this liquidity flow and investor interest to continue for some time,” Samrat Dasgupta, CEO of Esquire Capital Investment Advisors told news agency Reuters.
* Positive global cues
US equities were upbeat last week with all three key indices in the US recording weekly gains to the tune of 1-2.8 per cent, Modi added.
Broader Asian shares rose after Powell struck a dovish tone during his long-awaited speech, although investors remained cautious about growth prospects in China.
Japan’s Nikkei climbed up by 0.4 per cent while Hong Kong shares were higher by 0.35 per cent. South Korea’s Kospi rose by 0.32 per cent.
* Macroeconomic factors
Investor sentiments were also boosted on expectation that the country’s economic growth likely touched a record high in the quarter through June on low base effect.
Centre is scheduled to release gross domestic product (GDP) data for the first quarter ended June 30 on August 31.
Besides, policy reforms, investment facilitation and ease of doing business have resulted in increased foreign inflows into the country.
Foreign direct investment (FDI) into the country rose by more than twofold to $17.57 billion during April-June this fiscal on account of measures such as policy reforms and ease of doing business.
FDI equity inflow grew by 168 per cent in the first three months of 2021-22 ($17.57 billion) as compared to the year ago period ($6.56 billion).
* Rise in rupee
The Indian rupee appreciated 31 paise to 73.38 against the US dollar in opening trade on Monday, tracking a positive trend in domestic equities.
With this, the rupee rose to its strongest in two and half months.
At the interbank foreign exchange, the rupee opened at 73.46 against the dollar, then surged higher to 73.38, up 31 paise over its previous close.
(With inputs from agencies)