Sensex closes at lifetime high, Nifty crosses 6,400 level

The Sensex closed 1.11 per cent or 237 points higher on Thursday, extending a recent rally as continued buying by foreign investors boosted blue chips such as ICICI Bank.

The Mumbai Benchmark index hit a record high of 21,492.49 points, surpassing its previous historic high of 21,483.74 points posted in December last year, while Nifty closed at a new all-time high  of 6,401 points.

The strong rally has defied expectations that foreign investors would grow more cautious as the Federal Reserve continues to withdraw its monetary stimulus and ahead of general elections set to kick off on April 7.

Instead, overseas investors have bought heavily into India as a sharply narrowing current account deficit (CAD) and a more stable rupee have increased confidence in a country that only last year was in the midst of its biggest market turmoil since the balance of payments crisis of 1991.

On the BSE, major gainers were Prestige Estates (12.23 per cent), Reliance Infra (10.01 per cent) and Jaiprakash Associates (8.88 per cent).   

Glaxosmithkline stock continued to fall after a 7.17 decline on Wednesday. On Thursday, the stock fell 2.56 per cent after the closure of open offwer by its parent company GlaxoSmithKline Plc (GSK). Other losers were IPCA lAB (2.67 per cent), ABB India (1.84 per cent) and Eicher Motors (1.65 per cent)

The Sensex ended at 21,513 points, its lifetime closing high on Thursday. The rally comes as foreign investors have been buyers of Indian shares for 14 consecutive sessions for a net total of about $900 million.

Brokers said sentiment firmed up on optimism that a shrinking current account gap will bolster the rupee and spur overseas investors to increase holdings of Indian shares.

Positive cues trend in the Asian region and higher opening in Europe as investors awaited the central bank's interest rate decision and US data on jobless claims, further supported the domestic market surge, traders said.

Sectoraly, the BSE Realty sector index gained the most by rising 4.09 per cent, followed by Power index (2.45 per cent), Metal index (2.23 per cent) and Oil & Gas index (2.23 per cent). However, the Healthcare index fell 0.27 per cent.

"Market has hit a new high on the basis of strong FII flows as well as increasing retail participation. Normally it is seen that there is pre election rally and that is what is reflected in the levels. We feel a strong political mandate would result into increasing level of optimism and hence new levels for the market," said Motilal Oswal, CMD, Motilal Oswal Financial Services Ltd.

CAD has narrowed sharply, to 0.9 per cent of gross domestic product in the October-December quarter, according to data on Wednesday, improving sharply from the record high of 4.8 per cent of GDP in the year ended in March 2013.

The improving CAD, and the strong foreign inflows, have also boosted the rupee, which is up 12.2 per cent since hitting a record low in late August.

Blue chips have been the main drivers of the rally. On Thursday, ICICI Bank gained 3.33 per cent while and Reliance Industries rose 1.87 per cent.

(With Reuter inputs)