Stock indices scaled fresh record peaks on Thursday with the benchmark BSE Sensex breaching the psychological 50,000 mark for the first time. The 30-share BSE index rose more than 300 points, hitting an all-time high of 50,127 in early trade. While the broader NSE Nifty Index rose nearly 100 points to 14738.
Among the top winners of the BSE package were Bajaj Auto, Bajaj Finance, Bajaj Finserv, HCL Tech, Reliance Industries and Asian Paints, with shares rising 1.43 percent. On the NSE platform, all sub-indices are trading green with Nifty IT outperforming the index by jumping 1 percent.
These are the main reasons behind the increase:
Upbeat Global Cues: Domestic indicators rose amid optimism over the administration of new US President Joe Biden, which will mean more support for the faltering US economy, leading to a major recovery for the Asian region dependent on exports.
Market players here said that as the US markets set new records, Sensex and Nifty could see smart earnings too.
Wall Street welcomed the new US president by rising on Wednesday, closing at record highs amid promises of massive economic stimulus and relief that the inauguration was quiet.
All three major indices (Dow Jones, Nasdaq, S&P 500) closed at record highs after Biden's inauguration as the 46th president of the United States in a peaceful ceremony.
"Overall, this is an increasingly optimistic market that higher fiscal spending will boost the economy and drive earnings growth," Art Hogan, senior market analyst at National Securities, told AFP.
* Strong corporate earnings: Analysts said strong corporate earnings from Tata Consulting Services (TCS), Infosys, Wipro, HCL Technologies and HDFC Bank bolster the upside on Dalal Street.
* The 2021 budget in focus: Investor sentiment remained positive amid hopes for bold economic reforms in the next 2021-22 Union budget. Finance Minister Nirmala Sitharaman will present this year's budget on February 1.
"Markets are also buoyed by expectations of positive announcements from the upcoming Indian budget and encouraging corporate earnings," Ajit Mishra, Religare Brokings' vice president of research, told Reuters.
Union Budget 2021-2022
* Foreign fund inflows: Wednesday's rally was supported by a net inflow of foreign funds of Rs 2,289 million, although local funds were net sellers at Rs 865 million, BSE data showed. On Tuesday, foreign institutional investors (FIIs) were net buyers in the capital market by buying shares worth Rs 257.55 million.
* IPO push: The first IPO of 4,633 crore for Indian Railway Finance Corp (IRFC), which closed on Wednesday, took place 3.5 times. With this offer, the government aims to mobilize around Rs 1,544 crore by diluting a portion of its stake in NBFC, while the company is raising Rs 3,089 crore as new capital.
Wednesday also saw the launch of the Indigo Paints IPO, which was signed almost twice.
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