Fuelled by foreign money, D-St indices head for stratosphere
Sensex closing above 66,000 and the Nifty breaking past 19,500 for the first time after US inflation in June rose at the slowest pace in more than two years, fuelling bets the Federal Reserve may be close to ending its rate-hiking cycle. Foreign fund managers continued to pour money into Indian equities, buying stocks worth ₹2,636.43 crore on Friday as the dollar fell to a 15-month low on easing inflation. A weakening dollar is fuelling appetite for riskier assets such as emerging markets.
The Sensex advanced 502.01 points or 0.77% to close at 66,060.90, beating last week's closing high of 65,785.64. Intraday, the Sensex posted a new high of 66,159.79. The Nifty topped 19,595.35, beating the previous lifetime high of 19,567.
The index closed at 19,564.50, up 150.75 or 0.78% from the previous close. The Nifty's previous closing record was 19,497.30 on July 6. «Hot money is flowing into India and will continue to flow from overseas investors,» said Mayuresh Joshi, head, equity research, William O'Neil India.
«India is one of the very few destinations that promise value and returns to investors given long-term growth prospects.» Joshi said markets could continue to rise in a staggered manner but warned investors to be cautious as valuations have run ahead of long-term averages. Investors are betting big on India in anticipation of the end of the rate-hike cycle as well as earnings expansion, he said. «Investors need to be more selective.
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