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Sensex hits record high, then closes with moderate gains; SBI surges 8%

Livemint logo Livemint 31-10-2019
© Kunal Patil/Hindustan Times via Getty Images

Indian markets hit a new high today after Sensex rose as much as 340 points to 40,392, overtaking 4th June highs of 40,312. Positive global cues after a rate cut by the US Federal Reserve, buzz of more tax reforms and strategic stake sale in many PSUs lifted the sentiment.

The broader Nifty also hit 11,945 at day's high. But markets pared some gains on the derivative expiry day to settle off intra-day highs. The Sensex closed 77 points higher at 40,129, its second highest close ever, while Nifty settled at 11,881, up 0.28%.

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"Market is clearly in a positive setup with festive season seeing improvement in demand and corporate tax rate cut providing the much needed earnings boost. Considering there is likely sequential improvement and earnings visibility, we believe market will continue to trend upwards. We have a April 2020 Nifty target of 12,800," said Naveen Kulkarni, head of research at Reliance Securities.

Shares of Yes Bank surged as much as 35% today after the private sector lender said it has received a binding offer from a global investor for an investment of $1.2 billion in the bank through fresh issuance of equity shares.

PSU banking stocks were in the spotlight today with SBI surging 8%.

The Nifty PSU banking index rose nearly 4% with Central Bank and Allahabad surging 12% and 5% respectively.

Apart from SBI, other top gainers in the Sensex pack included Infosys (4%), Tata Motors (3.5%) and HCL Tech (1.5%).

Better-than-expected earnings from some market heavyweights, corporate tax cut and buzz of strategic disinvestment are catalysts of the current leg of the rally, says Sanjiv Bhasin, director of IIFL Securities. In the near term, 12,000-12,400 could be on the cards, he added.

The global backdrop remains positive with Wall Street rising to new highs overnight. The US Federal Reserve on Wednesday cut interest rates for the third time this year but signaled a pause unless the economy takes a turn for the worse.

In a statement accompanying its decision to cut rates, the Fed dropped a previous reference that it "will act as appropriate" to sustain the economic expansion - language that was considered a sign for future rate cuts.

(With Agency Inputs)

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