RBI record dividend buoys bourses

Mumbai: Benchmark stock indices Sensex and Nifty rallied more than 1.6 per cent to close at lifetime high levels on Thursday following buying in banking, oil and auto shares and a record dividend payout by the RBI to the government.

Regaining the 75,000 level after its best single-day gain since January 29, the 30-share BSE Sensex closed at all-time peak of 75,418.04, up by 1,196.98 points or 1.61 per cent over the last close. During the day, it zoomed 1,278.85 points or 1.72 per cent to reach its all-time intra-day high of 75,499.91. The NSE Nifty inched closer to the record 23,000 mark during the day. The 50-issue index went up by 369.85 points or 1.64 per cent to 22,967.65. During the day, it jumped 395.8 points or 1.75 per cent to 22,993.60 - its intra-day record peak.

“The headline index posted a record gain, with leading sectors such as banking and automotive outperforming. The RBI’s record dividend is akin to an indirect rate cut, and is expected to reduce bond yields. Early onset of southwest monsoon has provided a boost to the domestic market, which was underperforming in the last two months to other emerging markets,” Vinod Nair, head (research), Geojit Financial Services.

In the broader market, the BSE midcap gauge climbed 0.58 per cent and smallcap index went up by 0.27 per cent. Among the indices, auto climbed 2.28 per cent, capital goods by 2.13 per cent, bankex by 1.98 per cent, financial services by 1.64 per cent, services by 1.63 per cent, teck by 1.42 per cent, consumer discretionary by 1.19 per cent and IT by 1.18 per cent.

Metal index emerged as the laggard. The market capitalisation of listed companies on the NSE hit $5 trillion mark. “Today, there was enthusiasm in the equity market after the RBI approved a Rs2.1 lakh crore dividend to the government. This indicates a better fiscal position and softer bond yields going forward. As a result of this positive move, we are seeing some short covering in the market.