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Global markets, including India, rallied after the Bank of Japan (BoJ) accelerated its quantitative easing to ¥80 trillion from about ¥60 trillion.
The Nifty and the Sensex closed at an all-time high of 8,322, up 1.87 per cent or 153 points and 28,866 * , higher by 1.9 per cent or 520 points, respectively.
In a statement, BoJ said it would purchase Japanese government bonds so that their amount outstanding increases at an annual pace of about ¥80 trillion. It also extended the average remaining maturity of its bond purchases to 7-10 years (an extension of about three years).
The Bank tripled its purchase of exchange-traded funds (ETFs) and Japan real estate investment trusts so that their outstanding would increase at an annual pace of about ¥3 trillion and ¥90 billion, respectively.
At a time, when the US Federal Reserve ended its third round of the so-called quantitative easing programme, the BoJ announcement came as a pleasant surprise for global equity investors. Analysts here expect that Japan’s move will see investor money moving to Indian shores, thanks to the reform initiatives of the Modi government. All major global indices (CAC 40, DAX, FTSE 100, Dow Jones and Nasdaq) were trading in the green.
Vinod Nair, Head of Fundamental Research, Geojit BNP Paribas Financial Services, said: “The ECB and Japan are pushing liquidity and momentum. In the medium term, the issue is how structural paralysis in Europe will be resolved.”
FIIs bought net equities worth ₹1,755 crore while domestic institutional investors offloaded equities amounting to ₹249 crore. Retail investors on the BSE were also net short on equities worth ₹207 crore.
The rupee strengthened five paise against the dollar to close at ₹61.41. All the broader and sectoral indices closed in the green. Volatility was up 0.23 per cent and the volatility index India Vix closed at 13.2950. DLF, ITC, ACC, Zee Entertainment and Bharti Airtel were the only losers in the Nifty on Friday.
Elite club Friday’s rally also helped Maruti Suzuki and Axis Bank join the trillion rupee market-cap club.
Maruti Suzuki, which closed at ₹3,338.35 on the BSE, commands a market cap of ₹1.008 lakh crore (1 trillion = 1 lakh crore). Axis Bank’s market capitalisation increased to ₹1.035 lakh crore. With this, 20 companies are now in the ₹1 lakh crore club.
* Please read the number as 27,866
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