Mumbai, April 9: Frenetic buying at the fag end of trade today by foreign institutional investors, who anticipate market-friendly policies by the new government after the elections, took both the key stock indices to historic highs.
While the Nifty breached the 6800-mark during intra-day trade, the BSE Sensex scored hefty gains of nearly 359 points to end at 22702.34.
The Sensex today began on a modest note and was seen consolidating its position for most of the trading session. However, its pace increased in the last 90 minutes of trade.
Sharp gains in the Sun Pharma counter came as brokerages gave a thumbs-up to its $3.2-billion acquisition of Ranbaxy Laboratories. Brokerages are of the belief that the deal, which has come at a reasonable price, will benefit Sun Pharma in the long run.
While the Dilip Shanghvi promoted company saw its share price rising on the day of the deal, the good run continued today as well with the scrip finishing with gains of nearly 7 per cent at Rs 627.80.
Banking stocks witnessed huge buying interest on expectations that the domestic economy is set for a turnaround. This was further supported by the IMF forecast of 5.4 per cent growth in 2014. This comes amid optimism that the new government will bring in more economic reforms.
Jignesh Chaudhary, head of research, Veracity Broking Services, said: “Local equities again hit all-time highs with the help of FIIs who have pumped $10.3 billion into local stocks and bonds this year.”
The third phase of polling will take place tomorrow and many feel the Nifty is set to touch the 7000-mark before the results on May 16. However, there are others who believe that stock prices could see an interim correction.
The Sensex opened at 22389.21, hit an intra-day high of 22740.04 and ended the day at 22702.34, a surge of 358.89 points, or 1.61 per cent, from its previous close, snapping three days of losses. This is the biggest gain for Sensex in the last one month. The previous best gain was on March 7 when the Sensex spurted 405.92 points.
Likewise, the 50-share NSE Nifty also flared up 101.15 points, or 1.51 per cent, to end at a new peak of 6796.20. It recorded a historic intra-trade high of 6808.70 today.
Observers add that the markets will focus on the elections for now, but would shift attention to the formation of the new government and its policies in May.