Key stock indices rose to their highest levels in nearly two months today, led by sharp gains in index heavyweight Reliance Industries and Larsen and Toubro. The Bombay Stock Exchange (BSE) Sensex rose 1.27 per cent, or 218 points, and the S&P CNX Nifty of the National Stock Exchange (NSE) rose 1.35 per cent, or 69 points.
The Sensex closed the day at 17,383 while the Nifty was last traded at 5,198, above its crucial resistance level. According to market players, the indices may witness a breakout rally from here.
Stock indices have been moving in a narrow range since the beginning of this month in the absence of cues. The volatility index has also been at its lowest level (around 20) since it was launched in 2007, indicating lack of investor interest.
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“Foreign institutional investors (FIIs) have shown a renewed interest in domestic markets after the Budget. While the past month has been lacklustre, it is likely that the markets may witness significant activity in April when corporate results are announced and worries over European debt problems start to settle, as is being pointed out by global market experts,” said Ajay Pandey, assistant vice-president for equities at Intime Spectrum Securities.
According to provisional figures from BSE, FIIs were net buyers to the tune of Rs 3,77.84 crore in the cash market today. Domestic institutional investors were subdued due to bank holiday today. FIIs have pumped in over $ 2.5 billion in domestic equity markets in the past 10 trading sessions.
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The volume in the market also improved, both in cash and derivatives segments.
Reliance Industries rose 3.80 per cent to Rs 1,066. Larsen and Toubro was up 2.80 per cent to Rs 1,597. Other gainers were Tata Steel, Tata Motors, Sun Pharma, Mahindra & Mahindra and Hindalco Industries, which rose over 2 per cent.
“Some large funds have been churning their portfolios and buying stocks which have underperformed recently. Reliance is one such stock. However, the mood on the Street is still cautious and one should not read too much into today’s rise as it was on fairly low volumes due to absence of key domestic players,” said Mohit Mirchandani, head of equities at Tarus mutual fund.
Apart from the BSE Oil & Gas index, which was rose 2.78 per cent on the back of Reliance Industries, the BSE Metal index was the other top gainer (up 1.73 per cent).