Sensex hits fresh record high, Nifty ends May F&O series at 11,946

NEW DELHI: Domestic equity indices resumed their rally on Thursday, after a day’s hiatus, ending the May F&O expiry on an all-time high level led by gains in financials and IT stocks. Continued optimism that Narendra Modi government will introduce reforms to spur the economy kept investors in high spirits.

BSE Sensex ended 329.92 points or 0.84 per cent higher at 39,831.97. NSE Nifty settled at 11,945.90, up 84.80 points or 0.71 per cent.

India VIX eased 4.64 per cent to 15.64.


Surprisingly, the advance-decline ratio leaned mildly towards the sellers.

Market at a glance:
In the 30-pack index, 21 stocks settled in the black while nine in the red. NTPC, Bharti Airtel, Bajaj Finance, TCS and YES Bank were among the top gainers, rising up to 3 per cent. Whereas, Sun Pharma, M&M, ONGC, IndusInd Bank and Vedanta were among the index losers.

HDFC twins, RIL, Infosys and TCS were among the top index contributors.

In the sectoral space, 15 of 19 indices shut shop in the positive zone, with BSE Power as the best performer. It was trailed by Utilities, Telecom and Energy, all of which rose over 1 per cent each.

Meanwhile, auto index was the worst hit, shedding 0.61 per cent.

Midcap and smallcap indices rose but failed to match the gains in benchmark Sensex. BSE Midcap settled 0.40 per cent higher while BSE Smallcap 0.20 per cent.

Factors that boosted the rally:

F&O expiry
During the day traders rolled over their positions to the next series.

It was indeed a historical series for Nifty, as it finally surpassed the most awaited magical figure of 12,000. During the series, we saw some profit booking in the first half and then in the midst fresh buying emerged prior to the exit poll results. We saw a spectacular run as exit polls were in favour of the existing government. On the final result day, Nifty clocked record highs, but couldn’t sustain at the higher levels due to the profit booking. Finally, after the outcomes, the benchmark stabilised and headed in the northward direction to eventually conclude the series tad above 11,900,” said Sneha Seth, Derivatives Analyst at Angel Broking.

Optimism over economic outlook
Narendra Modi will take oath as Prime Minister later in the day. It is expected that he would likely come out with policies and measures that would boost the Indian economy. This gains more significance at a time when global growth worries are plaguing economies the world over.

"We remain constructive as far as the market is concerned. As far as this election victory is concerned, BJP converted this strong mandate that is it turned the black swan event of 2014 into a new normal. This strong victory has got very important implications. We believe they will be in a position to take forward bolder and tougher reforms," said Vivek Mahajan, Aditya Birla Money.

Expert Take
Indian bourses seem to be in a race with no looking back. Choppiness on D-Street has increased as Nifty aims to reach its previous highs by crossing the 12,000 levels. All eyes are on the Monetary policy next week and implementation of strong reforms by the newly elected government. However, this frenzy will be short-lived as the indices are currently trading at very high multiples and any adverse news on local or global front can lead to severe correction in the market
- Umesh Mehta, Head of Research, Samco Securities