Mumbai: The equity markets started the week on a robust note with the Sensex and Nifty vaulting to a 17-month high amidst a gush of foreign money as a lower than expected rise in US payroll data dampened the prospects of a rate hike by the US Federal Reserve in the near term.
The Sensex soared 445.91 points or 1.56 per cent to end the day at 28,978.02 while the Nifty surged 133.35 points or 1.51 per cent to close the session at 8,943. The Nifty is just 53.25 points away from its highest close of 8996.25 while it is still 176.2 points short of its all time intra-day high of 9,119.20 hit on March 4, 2015.
Additionally, reports about India likely to achieve record production of pulses triggered fresh buying in interest rate sensitive banking and automobile stocks as lower inflation would prompt RBI to cut rates.
According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) pumped in a record Rs 1,438.72 crore on Monday.
“There is a risk-on rally that is currently underway in global markets as the prospects of a rate hike by the US Federal Reserve has receded in the near term.
The unabated flow of liquidity gushing into Indian markets has led to vibrancy in the market and as long as this liquidity remains strong, it would be difficult to foresee a correction in the near term,” said Ajay Bodke, CEO and chief portfolio manager- PMS at Prabhudas Lilladher.
However, he added that investors should remain cautious at these levels. “It would be better to revisit the portfolio at every rise and check for any vulnerabilities. One should make fresh buying in only those companies which are fundamentally strong with good earnings visibility for atleast another 2-3 years,” Mr Bodke added.
The shares of Tata Motors jumped 7.19 per cent after the company-bagged orders for over 5,000 buses from state transport units across India.
The order value is estimated to be Rs 900 crore.
