Led by financials, the sensex crossed the 54,000-mark for the first time early on Wednesday 4th August 2021, as foreign funds continued to pour money in India as they stare at uncertain future relating to several tech giants in China.
The sensex rallied 546 points or 1% to close at 54,370 points. At the close of session, the Nifty also rallied 126 points, or 0.8% to close at 16,259.
Investors are also bullish as several states are relaxing their Covid-induced restrictions, raising hopes that the struggling domestic economy could weather the negative impact of the second wave better than earlier estimated.
End-of-the-session data on the BSE showed that foreign funds were net buyers at Rs 2,829 crore, adding to a Rs 2,100-crore net inflow on Tuesday. According to a top exchange official, with the Chinese administration coming down heavily on a large number of technology-driven companies in recent weeks, several foreign fund managers are eyeing the Indian market.
Seven out of the top 10 Sensex gainers were financials, a sector that had not participated much in the recent run-up. The volatility index dropped further, ending down nearly 4% at 13.2.
However, the broader market could not hold on to the gains: mid and small cap indices on both the exchanges closed about a percent lower after notching up new highs.
However, given strong recent gains, Morgan Stanley expects “modest” absolute returns going ahead.