Sensex sizzles past 25,000 mark on bullish FIIs

A day after equity markets took a breather on select profit taking, bulls were back in action on Thursday, helping the key 30-share benchmark index, the Sensex, end above the 25,000-mark for the first time.

Buoyed by continued spell of buying support from foreign institutional investors (FIIs) and expectations that government's policy action would improve investment climate going ahead, the Sensex gained 213.68 points or 0.86% from its previous to wrap up the session at 25,019.51. The broader 50-share NSE Nifty ended with gains of 71.85 points or 0.97% at 7474.10.

Strong buying in shares of metal, FMCG and government-owned oil marketing firms led the rally in key share indices, with market also looking for direction from the external front amid expectations of a monetary easing policy by the European Central Bank.

Market participants said there was some sector rotation on Thursday as the recent laggards gained, while government bank stocks that were on an upswing for some time took a breather. From April to date, shares of government banks have risen over 50%, contributing to the rise in Sensex. Since the beginning of the current fiscal, Larsen & Toubro (L&T) that gained 32% to date has contributed the highest with a 14.66% weightage to the index gain, RIL was up 17.01% (12.16% to the Sensex), SBI 40.58% (11.31% to Sensex) and ICICI Bank 17.30% (10.78%).

Other stocks that topped the growth chart over last 3 months since April 1 include Sesa Sterlite (jumped 67%), Tata Steel (40.94%), NTPC (36.93%), Coal India (35.85%), Axis Bank (33.31%), and ONGC (31.68%).

Major gainers on Thursday were BPCL, up 7.17% at Rs 617, Sesa Sterlite up 6.65% (Rs 314.95), Hindalco up 6.1% (Rs 170.50), Hindustan Unilever up 5.21% (Rs 636.45), Cairn up 4.74% (Rs 367.90), Tata Power up 4.39% (Rs 110.55) and Tata Steel up 4.3% (Rs 560.50).

FIIs since the start of the current fiscal have pumped in Rs 26,182 crore into the local stocks. On Thursday alone, they pumped in Rs 1,369 crore into equities according to the provisional data of the exchange.

Dealers said the market was under the firm grip of bulls and there were no specific reasons that aided the rally on Thursday except the feel good factor of the new government and hopes that the budget for the year would be pro-growth.

"Investors have a lot of expectations from the new government. The rally would pause post the budget in July and one would then look at global markets for cue," said Rahul Shah, vice president at Motilal Oswal Securities.

Meanwhile in the government bond market, yields continued to exhibit downward pressure. The 10-year bonds fell from 8.59% to 8.53% by the end of the day.

Dealers said they expect the yields to settle around 8.5% which so far have been evasive.

"The fall in yields is more due to liquidity, demand from foreign investors and an overall change in sentiment than economic factors pulling down the yields," said K Harihar, treasury head at FirstRand Bank.