In a choppy trade, benchmark indices were marginally higher in the afternoon trade after hitting their all-time highs in intra-day trade as services sector growth rising at fastest pace in 4 months in May lifetd the sentiments. PMI stood at 52.2, higher than the 50.2 figure seen in April. The 50-point mark separates expansion from contraction, indicating that the health of the sector continues to be overall positive.
The gains were, however, capped as investors remained cautious ahead of the Reserve Bank of India (RBI)'s policy meeting, which begins tomorrow.
Economists don’t expect the six-member Monetary Policy Committee (MPC) to tinker with policy rates of the Reserve Bank of India (RBI) when it meets this week. Twelve economists polled by Business Standard ruled out a rate cut by the central bank even as growth numbers slowed down and inflation surprised most on the downside.
Sentiment across the globe was muted after US growth in May missed expectations and after attacks in London killed at least seven people. Meanwhile, oil prices jumped after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed their ties with Qatar on Monday.
Both the Nifty and the Sensex have been on a record-breaking spree in the recent weeks. In intraday trade, the 30-share Sensex rose as much as 48 points to reach its new peak of 31,355, while the 50-share Nifty rallied 32 points to hit its fresh high of 9,677. Both indices hit their previous highs on June 2.
At 2:42 pm, the S&P BSE Sensex was trading at 31,314, up 41 points, while the broader Nifty50 was ruling at 9,680, up 27 points.
The S&P BSE Midcap and the S&P BSE Smallcap indices outperformed the frontline indices by rising 0.4% and 0.6%, respectively.
Lenders continued their rally after Finance Minister Arun Jaitley stressed that reviving banking sector and investment in private sector top his priority list. Banks were among the top gainers, with Yes Bank rising 2.25% and Axis Bank up 1.2%.
Among other gainers, Reliance Communications rose as much as 4.6% after the debt-laden mobile carrier said on Friday it won a seven month reprieve from its lenders.
Shares of jewellery retailers PC Jeweller Ltd, Gitanjali Gems Ltd and Titan Company Ltd gained after the Indian government said it will tax gold and gold jewellery, silver and processed diamonds at 3%under Goods and Services Tax.
Sector-wise, the S&P BSE consumer durables index shot up by 6.5%, followed by the capital goods index up 0.90% and the oil and gas index advancing 0.96%.