Sensex at all-time high

Coal India listing and US Fed’s QE-2 buoy market sentiment

Fireworks were lit on Dalal Street a day ahead of Diwali. The benchmark Bombay Stock Exchange (BSE) Sensex on Thursday came tantalisingly close to the psychological mark of 21,000 while ending the day at a new high. A spectacular listing by Coal India, which surpassed all expectations, and the US Federal Reserve announcing a $600-billion additional spend to revive the world’s largest economy lifted investor sentiment.

The 30-share Sensex gained steady ground during the entire trading session and, at one point, appeared close to breaching the 21,000-mark. However, it ended the day at 20,893.57, gaining 2.09 per cent, or 427.83 points. This is a new closing record for the Sensex, which last touched its high of 20,873.33 on January 8, 2008.

Meanwhile, the 50-share Nifty of the National Stock Exchange (NSE) settled the day with a gain of 1.97 per cent, or 121.30 points, at 6,281.80. The broader index is now only six points away from its all-time closing high of 6,287.85. Market participants now eagerly await the Muhurat trading session on Friday, when both indices are expected to register new peaks.

“The liquidity situation was good with Coal India listing today. Add to it the Fed announcement on QE-2, which will increase inflows to emerging markets, including India,” said Dinesh Thakkar, chairman & managing director, Angel Broking. “I will not be surprised if tomorrow our markets surpass the earlier peaks,” he added.

On Thursday, Coal India alone accounted for a total turnover of more than Rs 22,000 crore, which is almost at par with the daily combined average volumes of both the BSE and NSE.

On the global front, Fed chairman Ben Bernanke’s announcement of buying $600 billion in Treasury securities until next June to further reduce long-term borrowing costs sent a wave of optimism across markets. Equity indices in Asia and Europe gained ground on hopes of a revival in the world economy.

While Tokyo’s Nikkei was up nearly 200 points, Hong Kong’s Hang Seng gained 391 points, or 1.62 per cent. The Shanghai Composite also reacted positively, with a rise of 1.85 per cent. In Europe, the Frankfurt DAX was up 100 points, or 1.52 per cent.

Back in India, provisional figures showed that FIIs bought Indian equities worth nearly Rs 5,500 crore on Thursday. Among the Sensex constituents, State Bank if India, Reliance Industries, Tata Motors, Hindalco Industries and ONGC all gained over 3 per cent each. Tata Steel, DLF, Bhel, Infosys Technologies and ICICI Bank also gained.