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FII buy propels stocks

Mumbai, March 24: The Sensex closed above the 22K-mark for the first time after scaling an all-time high of 22074.34, buoyed by a rising tide of dollar inflows.

Foreign institutional investors (FIIs) swooped down on banking stocks amid optimism that a new BJP-led government would usher in economic reforms and kick-start a moribund economy.

The bellwether index closed at 22055.48 with the interest in banking counters fanned by expectations that RBI governor Raghuram Rajan would hold off again on an interest rate hike at the first bi-monthly review of the monetary policy on April 1 with headline inflation showing signs of easing.

The strong FII inflows had its impact on the forex markets where the rupee gained 12 paise against the dollar to end at an over six-and-a-half month closing high of 60.77. Dollar selling by exporters also aided the domestic unit’s gain against the US greenback.

Provisional data showed that the foreign investors made net purchases worth Rs 1,466 crore. So far in this month, the FIIs have bought stocks worth $2.27 billion.

Moreover, investments into Indian shares through participatory notes (P-Notes), a preferred route for high networth individuals (HNIs) and hedge funds from abroad, surged to the highest level in three months at Rs 1.73 lakh crore ($28 billion) in February.

According to Sebi data, the total value of P-Note investments in Indian markets (equity, debt and derivatives) rose to Rs 1,72,738 crore at the end of February from Rs 1,63,348 crore in January.

This was the highest level since December 2013, when the cumulative value of such investments stood at Rs 1,67,566 crore.

Market circles added that the sentiment among investors remain buyoant on expectations that an NDA government led by Narendra Modi would form the next government at the Centre.

While many experts argue that this has already being discounted by the markets, there are others who feel that there could be some more steam left in equity values. The opinion here is that the 50-stock Nifty could touch 7000 before results to the general elections are announced in the middle of May.

Reflecting the dominance of domestic factors in today’s trading, the Sensex resumed strong at 21827.50 and scaled a new intra-day high of 22074.34, before ending at 22055.48, a rise of 300.16 points, or 1.38 per cent.

It was the biggest daily rise in two weeks, surpassing the previous closing high of 21934.83 recorded on March 10 and lifetime peak of 22040.72 set on March 18.

A similar trend was also seen in the National Stock Exchange (NSE) where the CNX Nifty soared 88.60 points, or 1.36 per cent, to end at new record closing of 6583.50. It registered a new intra-day high of 6591.50 as well.

These gains came amid mixed cues from the global markets. While Asian shares ended higher despite news that China’s HSBC flash manufacturing purchasing managers’ index (PMI) had fallen to an eight-month low in March, the European markets were trading lower in early trades.

Broking circles said expectations that the domestic economy would do well, led to buying interest in banking, refinery, metal, auto and capital goods counters attracted good buying interest.

In line with the recent trend, defensives such as pharma, consumer durables and IT saw profit-booking.

ONGC rallied 4 per cent ahead of a board meeting to consider a second interim dividend. After market hours, the company said the board had approved a second interim dividend of Rs 4.25 per equity share.

 
 
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