Indian stocks staged a comeback on Thursday after Wednesday’s brief pause. The BSE benchmark Sensex gained 170 points to end at a six-week high, driven by fresh bouts of buying by funds. Both the Sensex and the NSE Nifty displayed a firm trend in their move towards the peak they had touched on July 24.
The Sensex closed at 15,616.31, short of 252 points from its lifetime high of 15,868, while the Nifty hit 4,518.60, a hundred points below its best.
The rally was driven largely by the improved sentiment in global markets and sustained net buying by foreign institutional investors (FIIs) in the last three trading sessions.
“Indices could easily cross their lifetime highs,” said Ajit Sanghvi, director, MSS Securities.
Heavyweights Reliance Industries, HDFC, ITC, SBI and ICICI led the Sensex rally. Cement companies, including Grasim, Ambuja and ACC, were all gainers. Mid and small caps did a shade better and the entry of 14 new stocks in the NSE derivatives section added to mid-cap action. “Mid-caps will continue to do better than large caps,” said Sandeep Neema, fund manager at JM Mutual Fund. At current levels, the markets appear to have priced in the possibility of a possible interest rate cut by the US Fed due to meet on September 18.
For the sluggish IT index, expected US economic data could prove crucial, analysts said.