Sensex hits 28K-mark; Nifty scales new high on hope of reforms

The BSE Sensex Wednesday breached the 28,000 level for the first time but ended a shade below at 27,915.88, its all-time closing peak, with gains of 55.50 points as banking and IT stocks rallied amid hopes of more reforms by government and a rate cut by the Reserve Bank.

The NSE Nifty also closed at record level of 8,338.30, gaining 14.15 points over the previous close. The 50-share index touched all-time intra-day high of 8,365.55 points, surpassing its previous record of 8,350.60 scaled on Monday.

During the day trade, the 30-share BSE Sensex scaled its fresh life-time high of 28,010.39 points, beating its previous record high of 27,969.82 reached on Monday.

"Market sentiment has been buoyed by a slew of economic reforms undertaken by the government recently, followed by optimism over strong second quarter earnings by blue-chip companies", said Manoj Choraria, a Delhi-based stock broker.

Addressing business leaders at New Delhi, Finance Minister Arun Jaitley Wednesday said the government was looking at areas like labour reforms, privatisation of some state-owned companies and improvement of land acquisition laws.

Besides government accelerating economic reforms, falling global crude prices, that raised hopes of an early cut in rates by the Reserve Bank, bolstered sentiments that lifted key indices to new peaks, brokers said.

Banking stocks such as Axis Bank, ICICI Bank and SBI led the rally among Sensex stocks. Axis Bank rose the most by 2.93 per cent among 30 Sensex scrips, followed by SBI (2.24 per cent) and DR Reddy (2.24 per cent).

ICICI Bank, HDFC Bank, Sun Pharma, Infosys, TCS and ITC were among major gainers that lifted the index to record high.

Stocks of state-run oil companies such as HPCL, BPCL and IOC hogged the liemlight and rose up to 2.37 per cent after global crude prices hit multi-year lows that would improve their margins.

However, Coal India, Sesa Sterlite, Bharti Airtel, RIL, Hindalco and Tata Power were laggards on profit-booking.

Foreign portfolio investors bought shares worth a net Rs 1,413.34 crore on Monday.

A mixed trend in the other Asian markets, a higher opening on the European markets on better corproate earnings, too influenced trading sentiments here, traders said.

"Markets consolidated post the recent rally in the markets, which has come about on the back of renewed optimism on fiscal reforms, sharp correction in crude prices, improved growth in US, liquidity easing by Japan and diminished possibilities of an immediate increase in US interest rates," Dipen Shah, Head- Private Client Group Research, Kotak Securities.

Among the 30 Sensex components, 14 stocks advanced, while 16 ended in negative zone.

The Banking index gained the most by surging 1.41 per cent, followed by Healthcare by 1.01 per cent, IT index by 0.73 per cent, Capital Goods index by 0.57 per cent, FMCG index by 0.32 per cent and Auto index by 0.05 per cent.

However, Metal sector index slipped 3.03 per cent and Power index fell 0.91 per cent.

With continued improvement in trading sentiments, buying activity by retail investors also spread to small-cap and mid-cap stocks, brokers said.

Stock market will remain close tomorrow on account of "Gurunanak Jayanti".

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