Sensex up 124 points to scale new peak on earnings, monsoon hopes

The Sensex rose 124 points to end at a new peak of 31,369.34 as investors pinned hopes on positive Q1 numbers that are due from next week, besides an above normal rain in the first month of monsoon.

The market was back to its bullish ways following the smooth implementation of GST, hopes of a pick up in the country's economic grwoth and an above normal monsoon so far, brokers said.

Realty, FMCG and banking sectors hogged the limelight and lifted the key benchmark Sensex to close at new peak but profit-booking towards the fag-end trimmed early gains.

The 50-share Nifty, after reclaiming the 9,700-mark to scale a high of 9,700.70, ended 36.95 points up, or 0.38 per cent, at 9,674.55, just shying away from its record closing of 9,675.10, recorded on June 5.

"Market has come out of the consolidation path due to progressing monsoon season and an expectation of positive quarter results after a hassle-free rollout of GST.

"On the global front, Fed minutes is giving a mixed tone and lacking unity to find consensus to deal with the balance sheet runoff at the time of undershooting inflation which will limit the outflow of foreign funds from EMs like India," Vinod Nair, Head of Research, Geojit Financial Services Ltd said.

Among realty stocks, Sobha Ltd, Prestige, Unitech, DLF Ltd, Omaxe, HDIL, Godrej Properties and Phoenix ltd evoked fresh buying support and gained up to 6.93 per cent.

Realty stocks had a leg up after the Karnataka cabinet yesterday approved rules under the new real estate regulation act that aims to protect home buyers.

However, global cues were muted as minutes from the US Federal Reserve's June meeting fuelled uncertainty about its plans for monetary policy.

Fed members are divided over the risk of inflation and disagreed on the timing of rate rise into next year, the minutes released Wednesday showed.

The banking space, led by SBI, PNB, Bank of Baroda, Federal Bank, ICICI Bank, IndusInd Bank, HDFC Bank, Yes Bank and Kotak Mahindra Bank extended gains, rising up to 4.56 per cent.

After a strong opening at 31,298.42, the BSE 30-share index hit a high of 31,460.70, before closing at a new record high of 31,369.34, up 123.78 points, or 0.40 per cent, breaking its previous record closing of 31,311.57 on June 19.

The gauge had gained 35.77 points in the previous session.

"Markets continued to trade in the positive zone today, despite geopolitical concerns in the Korean peninsula and underwhelming remarks from key central banks. Buoyant investor sentiment can partly be attributed to the smooth progress of southwest monsoons in India, which can have a material impact on growth in rural India and subsequently the spending power of the people," Karthikraj Lakshmanan, Senior Fund Manager – Equities, BNP Paribas Mutual Fund said.

Sensex components which supported the key indices to hit fresh highs were ITC Ltd (1.72 pc), Coal India (1.52 pc), Bharti Airtel (1.51 pc), Maruti Suzuki (1.33 pc), Tata Motors (1.17 pc), Tata Steel (0.84 pc) HDFC Ltd (0.77 pc), Hero MotoCorp (0.39 pc), Asian Paint (0.39 pc), Dr Reddy's (0.37 pc), RIL (0.11 pc) and L&T (0.10 pc).

However, Bajaj Auto, M&M, Sun Pharma, Axis Bank, ONGC, TCS and NTPC retreated on profit-bookiong.

Sector-wise, BSE realty index gained the most by rising 1.57 per cent, followed by FMCG index 0.75 per cent, PSU 0.68 per cent, bank 0.45 per cent, auto 0.37 per cent, metal 0.32 per cent, capital goods 0.13 per cent and healthcare 0.12 per cent.

In tandem with overall trends, the broader markets too turned bullish as buying activity gathered momentum lifting the small-cap index by 0.31 per cent and midcap by 0.30 per cent.

Meanwhile, Domestic Institutional Investors (DIIs) bought shares worth Rs 75.36 crore yesterday, while foreign portfolio investors (FPIs) made purchases worth Rs 227.57 crore, as per provisional data.

In the Asian region, China'a Shanghai Composite Index rose 0.17 per cent, while Japan's Nikkei fell 0.44 per cent and Hong Kong's Hang Seng shed 0.22 per cent.

European indices were trading lower in their late morning session.