The BSE Sensex crossed its all-time high to touch 14,745.97 on Monday, helped by automobile and pharmaceutical stocks that have been laggards in the last couple of months. Despite the overall positive momentum, stocks closed lower due to profit booking in the last half hour of trade and the Nifty, in fact, closed five points lower than the previous close.
The Nifty touched an all-time high of 4,362.95 before ending at 4,313. Conservative voices on Dalal Street talked of 15,000-15,500 as the new Sensex target.
The Sensex touching a new high was a reflection of the fact that the India story had matured and it continued to be the flavour of the season, said R Venkataraman, executive director, India Infoline. “At an annual GDP growth rate of 9 per cent, corporate earnings should be around 20 per cent, which means market returns can be 20-25 per cent this year,” he added.
The automobile, healthcare and capital goods indices outperformed the Sensex. “What we saw was sector rotation,” explained Phani Sekhar, fund manager, Angel Broking. Banking, capital goods and metals have been the front-runners in the rally so far this year and the underperformance of sectors like automobiles and information technology was one reason why the Sensex could not breach its peak easily.
On February 9, the Sensex touched a high of 14,723. Large-cap infotech stocks have been weighed down by the rupee’s appreciation; the combined weight of infotech stocks in the Sensex is close to 18 per cent.
Carmaker Maruti Udyog closed 3.8 per cent higher, aided by a 24 per cent rise in sales in June. Tata Motors gained 2.14 per cent and Mahindra & Mahindra ended up 1.51 per cent, the other two gainers from the sector.
"Two-wheeler sales have been hurt by the interest rate hike, which has still not had a major impact on car sales. But we cannot say confidently that automobile stocks will take the rally forward," said Sapan Patel, a Bombay Stock Exchange broker.