Sensex closes at record high; rupee strengthens to 64.60

Markets cheered India leapfrogging on the World Bank’s Ease of Doing Business rankings as the Nifty closed above 10,400 for the first time and the Sensex shot up 387 points to a record yesterday. India improved its rank considerably as it went up 30 notches to the 100th place in the World Bank report, which was released on Tuesday.
Eight core sectors provided more tailwind, which grew at a six-month high of 5.2% in September. Positive leads from global markets came as a catalyst. That apart, better-than-estimated earnings by some more companies kept the risk-on sentiment alive.
The broader 50-issue Nifty breached the 10,450-level intra-day for the first time. It closed at 10,440.50, a fresh life high, up 105.20 points or 1.02%, dismantling its previous record of 10,363.65 reached on October 30.
The Sensex hit a new all-time intra-day high of 33,651.52, but it gave in to some profit taking activity and settled at a new closing peak of 33,600.27, up 387.14 points, or 1.17%. In the process, the barometer went past its previous closing record of 33,266.16, touched on October 30.
“India’s historic climb on World Bank’s ‘Ease of Doing Business’ rankings and buoyancy in global peers provided tailwind to the domestic indices... Strength in the rupee also amplified the sharp surge supported by strong sentiment being played around PSU banks, realty, metal and FMCG sectors,” said Anand James, chief market strategist, Geojit Financial Services.
“While soft PMI numbers have not dulled the sentiment as yet, activities of FIIs and the dollar’s trajectory would be in focus with US tax reforms on the horizon,” he added.
The steep rally led to a big jump in investor wealth measured in terms of market capitalisation of BSE listed companies, which stood at Rs145tn, up by Rs1.08tn. Reflecting the market’s aggressive form, most sectoral indices ended in the green. Much of the charge came from buying in banking, realty, metal, FMCG and PSU counters.
Traders said uninterrupted funds inflows into equities was at work too. Bharti Airtel led the gainers’ pack, jumping over 8%, even as the company logged a drop in earnings for July-September. SBI, ICICI Bank, HDFC and Axis Bank lent a hand, rising by up to 4.58%.
Asian and European markets saw a firming trend ahead of the US Federal Reserve decision on interest rate hike. DIIs dug in by purchasing shares to the tune of Rs596.92 crore. But foreign portfolio investors turned their back net selling shares worth Rs531.82 crore on Tuesday, as per provisional data.
In sectoral play, telecom rallied the most by surging 3.93%, followed by realty, bank and metal. Broader markets ruled high too, with the small-cap index rising 0.55% and mid-cap 0.35%.
Meanwhile  the rupee yesterday closed at six-week high against the US dollar as local equity markets gained 380 points after India jumped 30 spots to 100 in World Bank’s ease of doing business ranking for 2018.
The home currency closed at 64.60 against the dollar — a level last seen on September 20, up 0.24% from its Tuesday’s close of 64.75. The rupee opened at 64.68 a dollar and touched a high of 64.51.
Traders focus on central bank meetings and the nomination of the next US Federal Reserve chair. According to a Bloomberg report, rates are widely seen staying unchanged and investors appear more focused on the nomination of the next Fed chair, which is expected today.
The 10-year bond yield ended at 6.893% compared to its previous close of 6.862%. Bond yields and prices move in opposite directions.
So far this year, the rupee has gained 5.15%, while foreign institutional investors have bought $5.81bn and $22.54bn in equity and debt, respectively.
Asian currencies were trading higher. South Korean won was up 0.54%, China renminbi 0.36%, China offshore 0.29%, Thai baht 0.24%, Singapore dollar 0.16%, Taiwan dollar 0.04%. However, Japanese yen was down 0.34%, Indonesian rupiah 0.13%, Philippines peso 0.11%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.63, up 0.08% from its previous close of 94.552.