Mumbai: Benchmark indices ended at new record closing highs on Thursday, the first working day of Narendra Modi-led NDA government in parliament. The rally in metals, oil & gas and FMCG stocks helped the BSE Sensex to close above the 25,000-mark for the first time ever. The index was up 213.68 points or 0.86 percent to 25019.51 while the NSE Nifty climbed 71.85 points or 0.97 percent to 7474.10.
The BSE Midcap and Smallcap indices gained 1 percent and 1.4 percent, respectively. Most of experts have consistently been saying that they are bullish on India, especially on hopes of getting strong signals from NDA government in its first Budget (likely in July) and going ahead. In an exclusive interview to CNBC-TV18, on the sidelines of Morgan Stanley Annual India Summit 2014, Sanjay Shah, Co-Country head and Co-head Indian Equity Business, Morgan Stanley, says the "realms of a strong policy framework in the making", has made India an attractive destination for foreign investors. He believes the investor interest has returned after election results.
International investors are closely monitoring the Union Budget and would look for signs of fiscal consolidation, he adds. Shah thinks now is the best time for investment in the last 20 years. He sees signs of economic growth bottom out and said that won't be surprised if the Nifty sees 20 percent growth in 2-3 years.
Meanwhile, finance minister Arun Jaitley has started pre-Budget interactions by meeting farmer leaders. The government should increase investments in irrigation, R&D and supply side management; set up irrigation authority; release irrigation bonds; stable export policy for farm products etc were some of the suggestions FM received. Oil sector was in focus today after the oil ministry sources told CNBC-TV18 that the ministry will consult prime minister's office (PMO) and finance ministry on hiking LPG and kerosene prices . Currently, the under-recovery of PSU oil companies on Kerosene stands at Rs 32.87 per litre and LPG at Rs 432.71 per cylinder.
BPCL (hit record high), HPCL and IOC gained 4-7 percent while ONGC gained 2.6 percent (touched record high) on hopes of fall in subsidy burden. BSE Metal, Oil & Gas, Power, FMCG, IT, Infrastructure and Capital Goods indices gained 1-3 percent. Sesa Sterlite was the top gainer in the Sensex, gaining 6.5 percent followed by Hindalco Industries, Tata Steel, Cairn India, Hindustan Unilever, Tata Power and Tata Motors with 3-5.5 percent. Index heavyweights Reliance Industries, HDFC, ITC and Infosys were up 0.7-1.5 percent.
However, shares of HDFC Bank, ICICI Bank, M&M, Dr Reddy's Labs and Cipla declined 0.5-1.5 percent. Advancing shares outnumbered declining ones by a ratio of 2132 to 883 on the BSE. On the global front, European markets were mixed (at 16 hours IST) as investors were cautious ahead of European Central Bank meeting.
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