Rising foreign fund inflows, which propelled the BSE Sensex to scale a fresh 32-month peak for the sixth straight session on Monday, raised concerns whether the market was rising too fast. Financials led the rally, which saw the benchmark index close 1.6% higher, on robust loan demand outlook.
The BSE Sensex rose 1.59%, or 311.35 points, to 19,906.10, with 25 of its components closing in the green. ?The biggest push is the huge amount of money that is coming in from overseas,? said Krishna Sanghavi, head of equities at Kotak Asset Management. ?Though all rationale as to economic growth and earnings growth is in place, the concern is we are seeing too much money coming in a bit too fast.?
On Monday, FIIs bought equities worth Rs 1,793 crore (provisional). Foreign funds have bought $16.21 billion of equities so far this year, which has helped the main index gain nearly 14%. For the year to date, the Indian benchmark has outperformed MSCI’s world equity index and its emerging markets index which have gained 0.1% and 5.1% respectively in the period. Top lender SBI gained 0.4% while ICICI Bank and HDFC Bank climbed 1.2% and 1.9%, respectively. ITC climbed 5.9% to Rs 178.30,its highest level in at least 20 years, helped by robust domestic consumption. Reliance Industries climbed 1.3% as it caught up with the broader market rally after the recent underperformance.
Bharti Airtel and Reliance Communications which were the only two Sensex negatives to log a yearly loss last year, significantly underperforming the main index, firmed 2.4% and 5.1% respectively.
Idea Cellular bucked the trend and slipped 1.4% as it said it continuously evaluates stake-sale proposals from time to time.
Export-focused outsourcers continued to rise with sector leader TCS scaling a new record high at Rs 921.50. Infosys and Wipro rose 1.1% and 0.1%, respectively, while TCS gave up early gains and shed 0.2% at close.
Hero Honda firmed nearly 4% after a report suggested KKR & Co, TPG Capital, Carlyle Group and Bain Capital LLC are competing to acquire a part of Honda Motor Co’s stake in the company. Bhel slipped 0.2% as Credit Suisse downgraded the stock to “neutral” from “outperform”. The 50-share NSE index climbed 1.6% to 5,980.45 points.