Mumbai: Bulls roared back after taking a reprieve for a week, sending both key indices Sensex and Nifty up almost five per cent to touch their new peaks on positive developments during the week under review. Increased buying by foreign funds, onset of the southwest monsoon, although few days late, likely hike in natural gas prices after July 1 and examining of raising import tax on sugar by the government to support local prices boosted the overall sentiments in the market.
Brokers attributed the rally to slight improvement in HSBC Indian Manufacturing Purchasing Managers' Index (PMI), a measure of factory production, in May. The sentiment also remained positive after the Reserve Bank of India (RBI) pleased markets by unlocking about Rs 40,000 crore of banking funds by cutting the statutory liquidity ratio (SLR) by 50 basis points.
Boosting investor sentiment, the RBI also allowed foreign portfolio investors to participate in the domestic exchange traded currency derivative markets. However, the apex bank kept the key policy rates unchanged in the second bi-monthly monetary policy review 2014-15. Shares of realty, metal, PSU, refinery, capital goods, power, consumer durable, banking and auto sectors firmed up sharply on good buying enquiries.
The Sensex surpassed its previous all-time high of 25,375.63 registered on May 16 to log its new intra-day historic high of 25,419.14 during the week before settling the week at 25,396.46, showing a sharp weekly gain of 4.87 per cent or 1,179.12 points, the best in five years.
