Sensex tops 30,000

Stable domestic economic fundamentals, steady buying by local and foreign funds and strong global cues helped the sensex to finally close above the elusive 30,000 mark for the first time in its 31-year history.

After a strong opening, the Bombay Stock Exchange's bellwether index of thirty companies scaled an all-time high at 30,167 and overcoming a bout of late selling, closed at 30,133, up 190 points on the day. Nifty on the NSE too closed 42 points higher at 9,352, also an all-time high.

The sensex, in intra-day trades, had crossed the 30,000 mark more than two years ago and then again earlier this month, but had never closed above this mark as strong selling emerged soon after in both the sessions. The market has risen nearly 53% since Narendra Modi was named the BJP's prime ministerial candidate in September 2013.

The recent market rally, combined with a non-intervention strategy by the Reserve Bank of India, has led to strengthening of the rupee.On Wednesday, the Indian currency rallied to a 20-month high at 63.93 to a dollar and closed at 64.11, up 17 paise from Tuesday's close. During Wednesday's session, foreign funds were net sellers at Rs.493 crore while domestic funds were net buyers at Rs.1,011 crore. So far in the year, while foreign funds have net bought stocks worth Rs.43,200 crore, domestic funds have net pumped in nearly Rs.15,800 crore during the same period. However, in the current month, while FPIs have been net sellers of stocks worth about Rs.1,000 crore, domestic funds have more than made up for the outflow with a net inflow of Rs.6,300 crore.

Interestingly, during the day's rally, midcap and smallcap stocks witnessed some selling. In the past few weeks, these stocks had outperformed the large caps and blue chips which in turn had led to cautious words from market analysts. In Wednesday's market, BSE's smallcap index closed 0.6% lower while the midcap index was down by a marginal 0.1%. As a result, despite the sensex's record close, investors' wealth, measured by BSE's market capitalisation, dipped by Rs.70,000 crore to Rs.124.5 lakh crore.

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