New Delhi, Sep 24: Stock indices in India continued to rally amid rate cuts globally, touching fresh highs on Tuesday.
Sensex breached 85,000 and Nifty crossed 26,000. Sensex closed the day at 84,914.04 points, down 14.57 points or 0.017 per cent, while Nifty closed at 25,940.40 points, up just 1.35 points or 0.0052 per cent.
Among the sectoral indices, Nifty metal was the top mover at 2.97 per cent. "...for the rally to continue, the Nifty must decisively break above the 26,000 level. Until then, we expect range-bound movement, with the index fluctuating between 25,800 and 26,000 over the next few hours to a few days," said Rupak De, Senior Technical Analyst, LKP Securities.
US Federal Reserve's monetary policy committee loosening interest rate by steep 50 basis points, in particular, lent fresh support to Indian stocks. Loosening monetary policy in the US through rate cuts typically leads to flight of capital to markets where policy rates are high.
The steeper the rate cut in the US, the more the tendency of flight of capitals to alternative investment destinations, including India. Continued buying by foreign portfolio investors (FPIs) also somewhat supported the stock indices. Foreign portfolio investors upped their investments in India, hoping for a better return on investments due to the interest rate differentials.
They have so far mopped up Rs 48,872 worth of stocks in India in September, data made available by NSDL showed. They have been net buyers for the fourth month now. "Several factors contributed to this rally, including strong corporate earnings, resilient macroeconomic indicators, and increased foreign institutional
(ANI)
