Sensex, Nifty at 2-yr high

But analysts not excited; breadth weak.

Benchmark equity indices of the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) touched a two-year high during intra-day trade on Monday, led by foreign institutional investor (FII) buying and a weak dollar. The gains were supported by firm European and Asian markets.

The NSE Nifty gained 0.4 per cent, or 21 points, and closed at 5,302. The index hit a high of 5,325 during the day, the highest since February 27, 2008. The BSE’s 30-share Sensex also touched a two-year high of 17,793 points. The index closed 0.38 per cent, or 66 points, higher at 17,711.

Consumer durables, fast moving consumer goods, metal and banking stocks helped the rise on Monday. Among benchmark stocks, Hindalco was the top gainer and rose 3.2 per cent to Rs 183. Mahindra & Mahindra rose 2.7 per cent to Rs 553 and Sterlite Industries rose 2 per cent to Rs 836.

The BSE mid-cap index was up 0.25 per cent, while the small-cap index fell 0.44 per cent.

However, despite both Sensex and Nifty rising, the market breadth was negative. On the BSE, 34.75 per cent, or 1,028 stocks, advanced, and 62.6 per cent, or 1,852, declined.

FIIs were net buyers of Rs 1,062.8 crore, according to provisional NSE data. Domestic institutional investors were net sellers to the tune of Rs 270.45 crore.

Mohit Mirchandani, head of equity at Taurus Mutual Fund, said: “There is a lot of stock-specific action. For the past few days, it has been observed that the market breadth has been weak, so one cannot read too much into the index touching new highs.”

Markets players attributed part of the gains to the net asset value-propping by mutual funds ahead of the close of the financial year. They said the Nifty had crossed the psychological 5,300 mark and this would fuel further rise in stocks in the coming days.

The rise was also attributed to a weak dollar. The dollar index, which measures the greenback’s value against six major currencies, was down 0.5 per cent. Almost all Asian currencies were stronger compared to the dollar. In the currency futures market, the most traded near-month dollar-rupee contracts on NSE and MCX-SX were quoting at 45.08, with total traded volume on the two exchanges at over Rs 25,000 crore.

Most Asian markets were higher as earnings from Chinese companies and a deal to provide Greece a financial safety net buoyed sentiment. The benchmark indices in Hong Kong, Singapore and Taiwan rose between 0.7 and 0.9 per cent. But, those in South Korea, Indonesia and Japan fell between 0.09 per cent and 0.65 per cent.