The Sensex closed 958 points higher at 59,885.36 after logging a new all-time high of 59,957.25. The Nifty ended up 276.30 points at 17,822.95 after touching intra-day high of 17,843.85.
Valuations at a 16-year High
Out of the 50 Nifty stocks, 38 gained and 12 fell.
If the Nifty manages to stay above 17,800, the index could advance 2-3%, analysts said. The real estate charge continued-the Nifty Realty index surged nearly 9%, the most among sectoral indices.
Foreign portfolio investors bought shares worth Rs 358 crore on Thursday while domestic institutional investors bought shares to the tune of Rs 1,173 crore.
“It is more of a momentum right now–the Nifty should be heading towards 18,200,” said Dharmesh Shah, head, technicals, ICICI Securities.
The stock surge, which started in March 2020, has catapulted share valuations to a 16-year high, heightening worries about overheating. The Nifty is trading at a one year forward PE of 24.43 times.
Other markets in the region also firmed up with the MSCI’s Asia Pacific index (excluding Japan) gaining 0.6%. News that one of Evergrande’s subsidiaries has resolved a coupon payment on a domestic bond eased concerns that had shaken up the global markets earlier this week as investors worried a default could have a domino effect. Chinese regulators, according to reports, have asked the group to avoid a near-term default on its dollar bonds. But investors remain on edge due to uncertainty over the outcome of the crisis and its impact on the Chinese property market.
Investors showed little sign of nervousness over the hawkish slant in the Fed’s tone. The US central bank on Wednesday signalled a sooner-than-expected increase in interest rates and reiterated it’s on track to start scaling back asset purchases. The dollar hit a one-month high on Thursday.
“The statements from the Fed with respect to the likely tapering announcement in the next policy meeting in November seem to be on expected lines. So, it is well factored in. Even potential rate increases in 2022 seem to be becoming a consensus view,” said Sanjeev Prasad, co-head, Kotak Institutional Equities.
The rise in the Volatility index or India VIX-a fear gauge-was limited at 0.7%, showing investors see lower risks to the market at the moment.
Bajaj Finserv surged 5% and hit Rs 18,000 for the first time. Larsen & Toubro, HDFC, Axis Bank, SBI and Reliance Industries gained 2-3%.
