Sensex in sniffing distance of 22,000 one month before polls

Mumbai: Indian markets wrapped up the week in style on Friday with the Sensex zooming to a new closing high of 21,919.79 and the Nifty galloping to yet another record close of 6,526.65 as FIIs continued to repose faith in an economy that is showing signs of stability ahead of general elections.

A sharp drop in current account deficit (CAD) and easing inflation bolstered expectations that the economy will see a turnaround soon, amid hopes for a strong mandate for the newly elected government after polls next month, said traders. Investor wealth ballooned by Rs 85,000 crore today. Aggressive buying by Foreign Institutional Investors (FIIs) mainly helped the benchmark indices rise for the fourth day in a row.

On Thursday, they bought shares worth Rs 1,272.93 crore yesterday as per provisional data. The BSE 30-share indicator resumed better and gradually improved further to a lifetime intra-day high of 21,960.89 before settling at 21,919.79, exhibiting a sharp rise of 405.92 points or 1.89 per cent. During the week, the Sensex has seen a spurt of nearly 800 points or 3.79 per cent. On Thursday it had closed at 21,513.87, surpassing previous closing high of 21,373.66 set on January 23, 2014. BHEL, ICICI Bank, Axis Bank and Reliance Industries led the 22 gainers in Sensex.

Realty, banking, capital goods and refinery counters saw heavy demand. The NSE 50-issue CNX Nifty also flared up by 125.50 points, or 1.96 per cent, to end at a new closing high of 6,526.65. It today hit a lifetime high of 6,537.80, crossing its previous record of 6,415.25 hit on December 9, 2013.

IT and pharma stocks ended weak amid strength in rupee. Finance Minister P Chidambaram today said the fiscal and current account deficits are under control and the economy is more stable than it was 18 months ago.

"After seven years, Nifty is walking comfortably into new highs. The current conditions are extremely conducive after a long time. Apart from the big political event in two months, corporate earnings are more important," said Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services. Overall market breadth was marginally negative as small-cap and mid-cap stocks attracted profit-booking.