Nifty, Sensex close at fresh lifetime highs after sharp late surge

US Fed minutes indicate slower pace of rate hikes, investors cheer

The benchmark indices rallied more than 1 per cent to hit fresh lifetime highs after the minutes of the US Federal Reserve’s November meeting showed that policymakers were considering smaller rate increases going ahead. As a result, most global markets rallied amid a retreat in the US dollar.

The Nifty surpassed the record high it hit on October 18, 2021. The Sensex, which surpassed last year’s highs on November 11, scaled a fresh high.

The Sensex rose 762 points, or 1.2 per cent, to close the session at 62,272, also hitting an intraday high. The Nifty rose 217 points, or 1.2 per cent, to close at 18,484, topping its previous closing high of 18,477 logged over 13 months ago.

The minutes from the US Fed meeting, which were released on Thursday, indicated that several officials supported easing the pace of interest rate hikes, though some batted for higher rates.               

         

The minutes gave investors hope that the US central bank will put an end to its 75 basis point hikes.

Analysts said the minutes indicated that rate hikes were peaking. This cheered the US markets and the S&P 500 hit a two-month high. The rupee appreciated 0.3 per cent and ended the session at 81.62.

UR Bhat, co-founder, of Alphaniti Fintech, said there was some indication that the rate hike cycle might be nearing its end, though he said there was nothing surprising in what policymakers had said.

“Domestic investors are bullish on India and they are lapping up any positive news flow. Oil prices are falling and with China’s Covid woes continuing India stands to benefit to an extent,” he added.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,232 crore on Thursday. So far this month, they have already bought shares worth about Rs 30,000 crore—the second highest monthly tally this year.

Business activity data in the US, which was released on Wednesday, showed that it shrank amidst falling demand. The composite purchasing managers’ index fell to 46.3, the second lowest level since the outbreak of the pandemic. A reading below 50 indicates contraction.

Though oil prices rose marginally on Thursday, they fell during the week amidst signs of a global slowdown.

All major Asian markets rose, except the Shanghai Composite index, as investors assessed the impact of the rise in Covid cases even as the Chinese central bank indicated that it will loosen monetary policy to stimulate growth.

However, despite strong global cues, the domestic markets traded only marginally higher for most of the day, before seeing a sharp surge just before closing amid expiry of derivatives contracts.

“It’s a rollover day and such activity during the last hour of trade is not surprising,” said Andrew Holland, chief executive officer of Avendus Capital Alternate Strategies.

The market breadth was mixed with 1,871 stocks advancing and 1,642 declining on the BSE. Infosys rose 2.9 per cent and was the best-performing Sensex stock, contributing the most to the index’s gains. It was followed by HDFC, which rose 1.9 per cent, and HDFC Bank, which rose 1.6 per cent.