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Key market bellwethers hit all-time highs once again on expectations from macroeconomic data - the index of industrial production (IIP) and consumer inflation - due on Wednesday.
The S&P BSE Sensex closed 98.84 points or 0.35 per cent higher at 28,008.9. During the day, it hit an all-time high of 28,126.48. The National Stock Exchange's CNX Nifty index closed at 8,383.30. It, too, had touched an all-time high of 8,414.35 during the day.
The CPI (consumer price index) inflation figures were released after market hours. Inflation numbers were at 5.52 per cent, better than Street expectations, raising hopes of a rate cut. IIP numbers, a key growth indicator, came in at 2.5 per cent,also ahead of expectations.
Sectors which benefitted from a lower interest rates were amongst the biggest gainers on Wednesday. Indices tracking the auto segment and the banking sector were the major gainers of the day. They were up 1.18 per cent and 1.12 per cent, respectively. Axis Bank was the top gainer of the day, it was up 3.02 per cent. Bajaj Auto and Tata Motors were up 2.1 per cent and 1.71 per cent, respectively.
The power and metal indices were amongst the worst performers of the day. The S&P BSE Power index was down 1.37 per cent while the S&P BSE Metal index was down 0.9 per cent. Amongst the losers, Cipla was down 3.06 per cent, while Tata Power dropped 2.47 per cent.
"The new highs that we see in India on almost a daily basis now is a simple case of P/E(price/earnings) expansion across the board in the short term as profits get discounted with a lower equity risk premium. The going is very good, and going will remain good for a long time to come," said Motilal Oswal, CMD ,Motilal Oswal Financial Services Ltd.
"We are in a bull-market. However…This is a liquidity driven rally, one will have to keep an eye on geopolitical risks," said Punita Kumar Sinha, Managing Partner, Pacific Paradigm Advisors speaking at the Morningstar Investment Conference.
Foreign institutional investors were net buyers by Rs 459.47 crore on Tuesday. Domestic institutions were net sellers by Rs 559.44 crore, according to provisional exchange data.
Oswal added a word of caution.
"…one needs to be very cautious about buying into individual companies now. There is a sense of general euphoria in the markets where anything and everything is going up," he said.
