Mumbai. On Thursday, amid the approval of record dividend payment by the Reserve Bank of India, both the benchmark indices of the local stock market reached their highest levels due to heavy buying in the shares of banks, petroleum and automobile companies.
Both BSE Sensex and NSE Nifty indices jumped over 1.6 per cent and closed at new records.
Sensex, an index based on 30 shares of BSE, made its highest jump since January 29 and closed at its all-time high of 75,418.04 points with a gain of 1,196.98 points. At one point during trading, it rose by 1,278.85 points or 1.72 percent to its all-time high of 75,499.91.
The National Stock Exchange (NSE) Nifty also took advantage of this tremendous rise and made a new record. Nifty closed at its highest level of 22,967.65 points, up 369.85 points or 1.64 percent. During the day’s trading, it jumped 395.8 points or 1.75 percent to reach a new all-time high of 22,993.60.
Vinod Nair, Head of Research, Geojit Financial Services, said, “The benchmark index made record gains due to the excellent performance of bank and auto sectors. “RBI’s record dividend payout is tantamount to an indirect tax cut and bond yields are expected to fall.” The Reserve Bank had said on Wednesday that it will give a record dividend of Rs 2.1 lakh crore to the government for the financial year 2023-24, which is double the budgetary estimate.
Among the Sensex companies, shares of Mahindra & Mahindra, Larsen & Toubro, Axis Bank, Maruti Suzuki, UltraTech Cement, IndusInd Bank, HDFC Bank, Bharti Airtel, ICICI Bank, Titan, Tata Consultancy Services and Reliance Industries closed with gains. On the other hand, shares of Sun Pharma, Power Grid and NTPC declined.
Neeraj Chadawar, Head (Fundamental and Quantitative Research), Axis Securities, said, “There was enthusiasm in the stock market after RBI’s approval of record dividend payment. This points to better fiscal position and soft bond yields. If the election results are in line with market expectations, we expect Nifty to reach new highs in the first week of June.” In the broader market, the BSE midcap index rose 0.58 percent while the smallcap gained 0.27 percent.
Among the sector-wise indices, the automobile segment had the highest increase of 2.28 percent, while the capital products segment had a growth of 2.13 percent and the banking segment had a growth of 1.98 percent. Deepak Jasani, Head of Retail Research, HDFC Securities, said that the biggest rise in Nifty in the last six months in terms of percentage points was seen on May 23.
Amidst this boom, the total market capitalization of the companies listed on NSE reached five trillion dollars. In other Asian markets, Japan’s Nikkei closed with gains while South Korea’s Kospi, China’s Shanghai Composite and Hong Kong’s Hang Seng were down. Most of the European markets were up in afternoon trade. US stock markets closed in the negative zone on Wednesday.
Global oil benchmark Brent crude rose 0.33 percent to US$ 82.17 per barrel. According to stock market data, foreign institutional investors (FIIs) sold shares worth Rs 686.04 crore on Wednesday.
On Wednesday, Sensex closed 267.75 points higher at 74,221.06 points and Nifty closed 68.75 points higher at 22,597.80 points.