The benchmark Sensex closed above the 39,000-mark for the first-time ever on Tuesday as investor sentiment remained upbeat on the back of positive cues from global markets and expectations of a rate cut by the Reserve Bank of India (RBI) when it meets for the policy review on April 4.

The 30-share Sensex opened the day higher by nearly 120 points at 38,988.57 before surging further to touch an intraday high of 39,121.69 — a gain of nearly 250 points over the previous day’s close.

The index finally closed at a new all-time high of 39,056.65, gaining 184.78 points or 0.48%. The index had breached the 39,000-mark on Monday but pared most of the gains to close below the psychological level. The broader Nifty, meanwhile, gained 44.05 points to close at 11,713.20. The 50-share benchmark is still some points away from its all-time high of 11,738.50 touched in August last year.

U.S. indices surge

Investor sentiment received a boost after strong gains in the overnight U.S. markets with both Dow Jones and S&P 500 surging over 1% each, followed by gains in major Asian markets such as Hong Kong, South Korea, Taiwan, Indonesia and China. Market participants believe that a mix of global and domestic factors are pushing indices to new highs with the upcoming RBI policy meet looked upon as an immediate positive trigger.

“Global majors such as HSBC, Citi and Goldman Sachs have already said they expect a rate cut. Further, strong manufacturing data is coming from the U.S. and China. Foreign flows into Indian equities are also hitting record highs,” said the research head of a domestic brokerage. Recently, BNP Paribas upgraded India to overweight from neutral citing reduced currency concerns and revival in some macroeconomic variables that are paving the way for some degree of earnings stabilisation.

Foreign portfolio investors are already net buyers at more than ₹9,500 crore in April after putting in a record ₹33,981 crore in March.

While index heavyweights like Tata Motors, Bharti Airtel, TCS, HDFC, State Bank of India gained on Tuesday, the overall market breadth was slightly weak as some of the side counters witnessed profit booking after the recent gains.

On the BSE, 1,366 stocks declined as against nearly 1,200 gainers.