Sensex hits all-time high after US Fed’s interest rate cut

The benchmark equity index, Sensex, surpassed its previous lifetime high during the early trade on Thursday. BSE benchmark Sensex hit a record high on Thursday amid a rally in select bank, auto, IT and pharma stocks. The 30-share pack kissed the day’s high of 40,344, surpassing the previous record high of 40,312 attained on June 4, a gap of exactly 100 sessions.

The Sensex peaked after the US Federal Reserve slashed it interest rates for the third time this year.

This comes after the Indian government took several concrete steps to comb at a sharp slowdown in the Indian economic activity recently.

The Modi government among other sector specific measures reduced the corporate tax which helped several companies report better than expected results for the second quarter ending September. Sensex which comes off all-time high, ends 77 points higher and the Nifty tops 11,850.

The 100-day period saw high volatility as tax-related announcements in the July Union Budget triggered a selloff by foreign investors. FIIs sold stocks worth net of Rs 15,000 crore during this period. Domestic institutional investors absorbed the selloff and helped maintain some stability, pouring in Rs 63,000 crore, thanks to constant flow of money from retail investors.

Besides, global cues have also been favourable for the past few weeks. Global markets are bullish on US-China trade talks and the Brexit issue.

The Federal Reserve on Wednesday cut 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.

However, it has signaled its rate-cut cycle might be at a pause.

It must also be stated that the Sensex plunged after it peaked on July 4 in anticipation of a corporate friendly Union Budget.

However, contrary to expectation Finance Minister Niramala Sitharaman introduced unpopular taxes like cess on Foreign Portfolio Investment, which caus ed massive outflow of foreign funds and sharp decline in stock market.

The 30-scrip Sensitive Index (Sensex) on Thursday opened on a positive note. The Sensex of the BSE opened at 40,211.99 and touched a high of 40,245.82 and a low of 38,587.79 after closing at 40,178.25 on Tuesday.

On the other hand, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 11,890.45 after closing at 11,844.10.

After opening on a strong note, the 30-share index was trading 263.69 points, or 0.66 per cent, higher at 40,315.56 in morning session. The broader NSE Nifty too advanced 71.85 points, or 0.61 per cent, to 11,915.95. Top gainers in the Sensex pack included SBI, Infosys, Tata Motors, Yes Bank and Sun Pharma, rising up to 4.35 per cent.

However, the platform turned volatile in the late deals and finished 77 points or 0.19 per cent higher at 40,129 ahead of the expiry of October futures and options (F&O) contracts; and broader NSE Nifty moved 37 points or 0.31 per cent up to settle at 11,881.

Major gainers in the sensex pack include Yes Bank, Infosys, State Bank of India (SBI), Tata Motors, Sun Pharma, Bajaj Finance, HCL Tech and Bajaj Finance with their stocks surging as much as 23.77 per cent.

Yes Bank shares surged after the lender received a binding offer for a $1.2 billion (approximately Rs 8,500 crore) funding from an overseas investor through fresh issuance of equity shares.  On NSE, except for Nifty FMCG (fast-moving consumer goods), all other sub-indices were trading in green with Nifty Media and PSU Bank leading the pack, up as much as 3.79 per cent.

Market benchmark BSE Sensex rose over 200 points in early trade on Thursday tracking massive foreign fund inflow amid positive domestic and global cues. Inching closer to its all-time intraday high, the 30-share index was trading 220.26 points, or 0.55 per cent, higher at 40,272.13, and the broader NSE Nifty advanced 64.80 points, or 0.55 per cent, to 11,908.90. Top gainers in the Sensex pack included SBI, Infosys, ITC, Sun Pharma, HDFC Bank and ICICI Bank, rising up to 2.64 per cent.

Sensex, which is currently on a gaining spree, had logged the highest ever closing — 40,268 — on June 3. Both domestic and global cues also helped the indices to maintain the surge.

BSE benchmark Sensex scaled a fresh record high on Thursday, exactly 100 days after it hit an all-time high of 40,312 on June 4, thanks to a rally in select index heavyweights including Reliance Industries (up 9 per cent), Asian Paints (28 per cent), Hindustan Unilever (up 19 per cent) and Bajaj Finance (up 15 per cent).

Agencies