Sensex closes at 1-year high, zooms 404 points on further reform hopes
Mumbai: The Sensex on Friday closed at one-year high of 18,752.83 surging by 404 points as the stock market gave thumbs up to UPA government's resolve to push ahead with economic reforms on the back of continued support from the Samajwadi Party.
After opening 62 points higher, the BSE benchmark index built on the initial momentum as foreign fund flows gushed in with the government yesterday notifying its decision to allow FDI in multi-brand retail, aviation and broadcasting sectors.
Soon after, the Sensex intra-day zoomed over 517 points to 18,866.87, a new high in 14 months, on reports that Samajwadi Party has pledged to continue support to the government on a day Mamata Banerjee-led Trinamool Congress pulled out of UPA.
Power, capital goods, metal and bank stocks led Sensex's rise. Finance Minister P Chidambaram's announcement of slashing withholding tax on overseas borrowings to 5 percent from 20 percent and approval to Rajiv Gandhi Equity Savings Scheme (RGESS) to encourage first-time retail investors to invest in stocks, also lifted the sentiment.
The 30-share Sensex finally closed at a 52-week high pf 18752.83 points, up 403.58 points or 2.20 percent, with 26 constituents led by ICICI Bank, L&T, HDFC Bank, Reliance and ITC ending higher.
Today's rise was the second biggest single-day gain by Sensex after September 14 this month. Across broader market, over 1,800 stocks closed with gains driving up investor wealth by a whopping Rs 1.27 lakh crore.
"Sensex ended the week at 52-week highs on the back of a 2 percent gain...This was a result of the fiscal reforms announced last week and also in current week.
FDI in aviation and multi-brand retail were notified without any delay. Concerns about stability of UPA government were also largely addressed," said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
The NSE 50-share Nifty index shot up by 136.90, or 2.46 percent to 5,691.15 after rising to day's high of 5,700.
Meanwhile, the rupee rose to its highest level in more than four months gaining 1.9 percent to 53.37 a US dollar.