Indian stocks reached new all-time peaks on Monday, boosted by index heavyweight Reliance Industries ahead of the demerger of a financial services unit and HDFC Bank’s strong June quarter results.
The Nifty 50 index closed 0.75% higher at a record high of 19,711.45, while the S&P BSE Sensex climbed 0.80% to 66,589.93.
Eleven of the 13 major sectoral indexes logged gains with the high-weightage financials adding 1.25%. Private lender, HDFC Bank, which is the highest weighted stock in Nifty 50 following its merger with HDFC, rose over 2% after reporting a jump in June quarter profit.
Reliance Industries also advanced 2%. Analysts expect the conglomerate to gain further from the demerger of financial services unit which comes into effect on July 20.
The rally extended to broader markets as well with smallcaps and midcaps hitting fresh 52-week and record highs, respectively.
“We remain highly optimistic about domestic equities due to robust foreign inflows and moderation in US inflation,” said G Chokkalingam, managing director for research at Equinomics Research.
Foreign portfolio investors have bought Indian equities worth 306.60 billion rupees in the first half of July and are on course to extend their buying streak for a fifth straight month.
“Weakness in China’s recovery is also a factor behind rising foreign inflows into India,” said Deven Choksey, director at KRChoksey Holdings.
Asian and European equities were subdued after China’s GDP rose at a lower-than-expected rate in the June quarter.
Among individual shares, Zee Entertainment jumped over 6% and powered a 3.15% rise in media index following the constitution of an interim committee to run operations after the market regulator restricted CEO Punit Goenka from holding key managerial positions in listed companies for one year.
Oil & Natural Gas Corporation lost nearly 2% after government raised the windfall tax on petroleum crude over the weekend.
- Reuters with additional editing by Sean O’Meara