Mumbai, May 23
Benchmark stock indices Sensex and Nifty rallied more than 1.6 per cent to close at lifetime high levels on Thursday following buying in banking, oil and auto shares and a record dividend payout by the Reserve Bank of India (RBI) to the government.Regaining the 75,000 level after its best single-day gain since January 29, the 30-share BSE Sensex closed at all-time peak of 75,418.04, up by 1,196.98 points or 1.61 per cent over the last close. During the day, it zoomed 1,278.85 points or 1.72 per cent to reach its all-time intra-day high of 75,499.91.
The NSE Nifty inched closer to the record 23,000 mark during the day. The 50-issue index went up by 369.85 points or 1.64 per cent to 22,967.65. During the day, it jumped 395.8 points or 1.75 per cent to 22,993.60 — its intra-day record peak.
“The headline index posted a record gain, with leading sectors such as banking and automotive outperforming. The RBI’s record dividend is akin to an indirect rate cut, and is expected to reduce bond yields,” Vinod Nair, head of research, Geojit Financial Services.“Early onset of southwest monsoon has provided a boost to the domestic market, which was underperforming in the last two months to other emerging markets,” Nair said.Among the Sensex firms, Mahindra & Mahindra, Larsen & Toubro, Axis Bank, Maruti, UltraTech Cement, IndusInd Bank, HDFC Bank, Bharti Airtel, ICICI Bank, Titan, Tata Consultancy Services and Reliance Industries were the major gainers.
Sun Pharma, PowerGrid and NTPC were the laggards.
The RBI will pay a record Rs 2.1 lakh crore dividend to the government for the fiscal ended March 31, more than double of budgeted expectation, helping shore up revenue ahead of a new government taking office.
The RBI board, at its 608th meeting on Wednesday, approved the transfer of surplus, the central bank said in a statement.” Today, there was enthusiasm in the equity market after the RBI approved a Rs 2.1 lakh crore dividend to the government. This indicates a better fiscal position and softer bond yields going forward.“As a result of this positive move, we are seeing some short covering in the market. If the election outcome aligns with current market expectations, we expect Nifty to reach new highs in the first week of June,” said Neeraj Chadawar, head – fundamental and quantitative research, Axis Securities.“The Nifty index has surged to a record high after the Reserve Bank of India (RBI) announced a substantial Rs 2.1 lakh crore dividend to the government. This development is a significant macroeconomic positive for the market, with direct implications for the fiscal deficit and bond yields,” Santosh Meena, head of research at Swastika Investmart Ltd, said.
