Sensex erases entire gains to slip in red after hitting record high

The benchmark S&P BSE Sensex hit a record high on Thursday as steps taken by the capital markets regulator to attract more investments and tackle massive bad loans of banks boosted sentiment.

The 30-share Sensex rallied as much as 239 to hit its all-time high of 31522.87, while the 50-share Nifty rose 65 points to 9698.85, 10 points away from its lifetime high of 9,709, hit on June 6.  

At 1:00 pm, the S&P BSE Sensex was trading at 31,482, up 199 points, while the broader Nifty50 was ruling at 9,684, up 51 points. 

In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices gained 0.6% and 0.7%, respectively.  

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,459 shares rose and 944 shares fell. A total of 138 shares were unchanged.

The Securities and Exchange Board of India (SEBI) proposed on Wednesday to ease some rules for foreign portfolio investors to steer more funds. It also relaxed open offer rules for investors buying distressed companies from banks to tackle mounting debt.

On Wednesday, minutes from the Reserve Bank of India's monetary policy committee revealed a less hawkish tone as it welcomed data showing inflation easing below target, but wanted more assurance the trend would continue before deciding whether to lower interest rates.

"There's a possibility of a rate cut, not now, but in some time. Rate-sensitive stocks, which include banks and auto, will benefit from the rate cut," told Vinod Nair, head of research at Geojit Financial Services to Reuters.

Banking stocks boosted both indexes, with the Nifty Bank index gaining as much as 0.8% to hit a record high.

Shares of Yes Bank and Federal Bank were up more than 2%, making them the top gainers on the Nifty Bank Index.

IDFC Bank rose as much as 3.5%, its biggest intraday percentage gain in more than one month, after the RBI allowed foreign investors to resume buying in the company.

Auto stocks also climbed, with the Nifty Auto index up much as 0.9%, its biggest intraday percentage gain in nearly two weeks.

Shares of Maruti Suzuki India and Tata Motors rose more than 1%.

Oil and gas companies fell, with GAIL (India), the top loser on the Nifty index, down as much 3%, while Oil and Natural Gas Corp slipped as much as 1.6%.

(With inputs from Reuters)