Sensex closes above 7,800

Market sees new closing high, rupee dips.

Buoyed by strong buying support from foreign institutional investors in consumer goods, financial services and drug shares, the Indian markets soared to a new high with the Sensex crossing the 7800-point mark for the first time today.

The lesser-than-expected hike in the US rates had promoted the current buying interest, said analysts. There were fears that the rate hike would reduce the attractiveness of the Indian stock market for global investors.

The Federal Reserve had announced a 25 basis point hike in the US rates on Tuesday. However, with the Fed signalling its intention to stick to its steady pace of rate hikes, foreign funds were not anticipating any steep hike in the US rates, said market watchers.

Other emerging markets have also witnessed sustained buying from FIIs, resulting in gains across Asian markets. While Nikkei, Hang Sang and Seoul Composite indices posted gains for the day, Singapore's Straits Times index was the only one to record losses.

The current rally has boosted investors' wealth to Rs 2053,656 crore, which is a 25 per cent improvement from the beginning of May. The Sensex posted a robust gain of 86.69 points, building upon the 134.25 points it added yesterday. The index added 220.94 points in the past few sessions, finally closing at 7,842.55.

"There is no other trigger than the overflow of liquidity. The markets have discounted even the rise in crude prices in the global market which have inched past $65 per barrel in the NYMEX," a leading broker said. FIIs net investments during August amount to Rs 3985 crore ($916).

Except information technology and oil and gas, all the 17 sectoral indices of the Bombay Stock Exchange posted gains and the rally was led by health care and pharma stocks. Three sectoral indices "" automobile, fast moving consumer goods (FMCG) and bankex "" rose over one per cent along with the mid-cap and small-cap indices.

Even though the Sensex has been on the rise, frontline stocks such as Infosys Technologies, ITC, HDFC Bank and TCS were the losers today. Infosys lost ground by 24.30 points or 1.05 per cent to be at Rs 2290.85 points, while ITC was down by Rs 12.35 or 0.71 per cent to touch Rs 1724.35.

Besides oil and gas majors like RIL and ONGC, refinery companies such as Chennai Petroleum and Mangalore Refineries & Petrochemicals also lost ground in the wake of spiralling international crude prices.

The rise of the pharma stocks was led by Dr Reddy's Laboratories, which gained Rs 39.55 or 4.89 per cent to touch Rs 849.10. Other major gainers included Cipla and Ranbaxy. HLL gained Rs 7.55 or 4.67 per cent to close at Rs 169.30, boosted by a couple of bulk transactions at Rs 160 and 162, a dealer said.