Positive global cues along with a strong rally in the banking stocks helped the Indian benchmark equity indices close at record levels on Monday. Investor sentiments were further lifted with the U.S. Federal Reserve hinting at a gradual approach to raise rates.
The 30-share Sensex gained 442.31 points, or 1.16%, to close at a new high of 38,694.11 on Monday.
The broader Nifty of the National Stock Exchange (NSE) closed at 11,691.95, up 134.85 points, or 1.17%. This was the biggest single-day gains for the two benchmark indices in almost five months. Among the Sensex pack, banking majors such as ICICI Bank, State Bank of India (SBI), Yes Bank, Axis Bank and Kotak Bank were among the top gainers. Bharti Airtel and Infosys also contributed to the gains, moving up by more than 2.5% each.
Asian indices gain
Incidentally, the Hang Seng rose by almost 600 points on Monday while Nikkei also gained almost 200 points. All the other Asian indices also registered gains while European markets also opened on a positive note.
A statement from the U.S. Federal Reserve Chairman Jerome Powell, last week, that raising rates in the US in a “gradual” manner would be best for the U.S. economy and encourage job growth” was the prime driver of the global rally.
In India, foreign portfolio investors (FPIs) remained net buyers in August till date — the second successive month — at almost ₹2,000 crore. They were net buyers at ₹2,264 crore in July. On Monday, the market breadth was positive with more than 1,400 stocks gaining ground against 1,294 declines. While the BSE Midcap index rose by more than 1%, the BSE Smallcap index gained 0.70% on Monday.
Market participants are of the view that while sentiment is looking upbeat due to a mix of global and domestic cues, investors should stay cautious and could also book some profits with the markets at record levels. An in-between dip could be used as a buying opportunity, they added.