The Bombay Stock Exchange (BSE) Sensitivity Index (Sensex) today closed at a 15-month high and crossed the 3,500-mark at 3,517.27.
After a two-day losing streak, the Sensex ended the day with smart gains of 69.82 points over yesterday's close. The National Stock Exchange's S&P CNX Nifty gained 21.30 points at 1,106.65.
The rally was boosted by massive buying in old economy stocks. Public sector unit (PSU) stocks led by Hindustan Petroleum Corporation Ltd (HPCL) and index heavyweights Reliance and Hindustan Lever ended firm and were supported by Telco, Hindalco, Grasim and Larsen & Toubro among others in the Sensex basket.
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Hindustan Lever Ltd gained 2.47 per cent to close at Rs 176.05, Grasim 9.53 per cent at Rs 489.75, HPCL 6.90 per cent at Rs 351.10 and Reliance 1.11 per cent at Rs 323.55.
Technology shares ended the day flat. Infosys Technologies was down 0.23 per cent at Rs 3,136.75, but Satyam Computer was up 0.36 per cent to Rs 181.95.
Bank stocks were also gainers, with market leader State Bank of India up 2.72 per cent to Rs 368.75, while ICICI Bank was up 0.86 per cent to Rs 141.25.
Market sources said the sustained market rally was due to considerable liquidity fuelling the buying. Suhas Naik, fund manager, equities with IL&FS Mutual Fund said, "A correction is not happening and there is an absence of selling."
Foreign institutional investors have been pumping in money into the market for the last nine consecutive trading sessions. So far in June, FIIs have invested Rs 1,787.80 crore in the market. Even domestic funds are flush with money, with a lot of inflows coming into their schemes.
"There are inflows across all sectors," said Naik, pointing out that the rally had permeated the broader market. The positive start to the monsoon has also contributed to the feel-good factor in the market.
The BSE registered a total turnover of Rs 1,235.21 crore with 1,191 gainers to 618 losers. The NSE registered a turnover of Rs 3,088.73 crore with 512 gainers to 195 losers.