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Key benchmark stock indices touched new highs on Friday due to broad-based buying, aided by expectations of a good monsoon, hopes of a gradual interest rate hike by the US Federal Reserve, and lower crude oil prices.
The S&P BSE Sensex soared past the 31,000-mark for the first time on sustained fund inflows amid robust corporate earnings. The Nifty 50 index also crossed the 9,600-level for the first time on Friday.
Gains in sectors such as metals, energy, oil & gas, along with heavyweight scrips Reliance Industries and ITC, took the key benchmarks higher.
The S&P BSE Sensex rose 278.18 points to settle at 31,028.21, while the Nifty 50 index rose 85.35 points to end at 9,595.10 after hitting 9,600.
The broader markets outperformed the benchmark indices. The NSE Mid-Cap index rose 1.4 per cent, while the NSE Small-Cap index rose 1.75 per cent. On the BSE, 1,829 shares rose and 836 shares fell. A total of 183 shares were unchanged.
The last 1,000-point rally has taken place in just one month.
Deepak Jasani, Head — Retail Research at HDFC Securities, said the marketsseem to be headed higher, with or without some intermittent corrections.
Pharmaceutical stocks were the biggest losers, with the Nifty pharma index losing over 1.5 per cent. Sentiments for the sector have turned bearish, given that pricing pressures are likely to affect its US business.
“The markets touched another milestone, supported by continued buying interest on index heavyweights post expiry. Expectations of a good monsoon and a slow pace of hikes in interest rates by the US Fed continue to weigh on sentiment. Mid- and small-caps outperformed as a recent correction scaled down the valuation gap with large caps, giving an entry point for those who missed the opportunity,” Vinod Nair, Head of Research, Geojit Financial Services, said in a note.
Analysts said broad index-level buying in the markets because of the F&O expiry is the primary reason for the latest bull run since Thursday. While major shorts were covered and longs have been rolled on Thursday, there was follow-up buying on Friday.
The bull run also coincided with three years of the Modi government.
Market watchers said the government had put in place all the building blocks for the economy to grow at a much faster rate.
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