Equity Indices Surge to Lifetime Highs on RBI’s Record Dividend and Blue Chip Buying
Mumbai: Benchmark equity indices witnessed a robust rally on Thursday, propelled by the Reserve Bank of India’s approval of the highest-ever dividend amounting to Rs 2.11 lakh crore to the government. Blue chips such as Reliance Industries and HDFC Bank also contributed to the bullish sentiment.
The 30-share BSE Sensex reclaimed the 75,000 mark, surging by 951.22 points or 1.28% to hit an all-time high of 75,172.28.
Similarly, the NSE Nifty rose by 308.45 points or 1.36% to reach a record peak of 22,906.25.
Leading the gains among Sensex constituents were Larsen & Toubro, Maruti, Mahindra & Mahindra, Axis Bank, IndusInd Bank, HDFC Bank, Bajaj Finserv, State Bank of India, and Reliance Industries. Meanwhile, PowerGrid, Sun Pharma, NTPC, and JSW Steel lagged behind.
The RBI’s decision to transfer a record dividend of Rs 2.1 lakh crore for the fiscal year ended March 31 significantly bolstered government revenues, exceeding budgeted expectations.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the positive implications of this dividend for the market, emphasizing potential fiscal deficit reduction and increased infrastructure spending by the government.
“Brent crude dipping below USD 82 is positive for India’s macros,” Vijayakumar noted, pointing out the favorable impact of declining global oil prices.
However, Vijayakumar also cautioned about the concerns raised by the US Federal Reserve meeting minutes regarding inflation persistence, which posed a potential negative for equity markets.
In Asian markets, Tokyo traded higher, while Seoul, Shanghai, and Hong Kong reported losses. Wall Street closed in negative territory on Wednesday.
Santosh Meena, Head of Research at Swastika Investmart Ltd, underscored the significance of the RBI’s dividend announcement in driving the Nifty index to a new record high, marking a substantial macroeconomic positive.
Foreign Institutional Investors (FIIs) were net sellers of equities worth Rs 686.04 crore on Wednesday, according to exchange data.
On Wednesday, the BSE benchmark rose by 267.75 points or 0.36% to settle at 74,221.06, while the NSE Nifty gained 68.75 points or 0.31% to close at 22,597.80.
