Sensex touches 85,000 mark, Nifty 26,000 amid global policy rate cuts

New Delhi [India], September 24 (ANI): Stock indices in India continued to rally amid rate cuts globally, touching fresh highs on Tuesday. Sensex breached 85,000 and Nifty crossed 26,000.
Sensex closed the day at 84,914.04 points, down 14.57 points or 0.017 per cent, while Nifty closed at 25,940.40 points, up just 1.35 points or 0.0052 per cent. Among the sectoral indices, Nifty metal was the top mover at 2.97 per cent.
"...for the rally to continue, the Nifty must decisively break above the 26,000 level. Until then, we expect range-bound movement, with the index fluctuating between 25,800 and 26,000 over the next few hours to a few days," said Rupak De, Senior Technical Analyst, LKP Securities.
US Federal Reserve's monetary policy committee loosening interest rate by steep 50 basis points, in particular, lent fresh support to Indian stocks.
Loosening monetary policy in the US through rate cuts typically leads to flight of capital to markets where policy rates are high. The steeper the rate cut in the US, the more the tendency of flight of capitals to alternative investment destinations, including India.
Continued buying by foreign portfolio investors (FPIs) also somewhat supported the stock indices. Foreign portfolio investors upped their investments in India, hoping for a better return on investments due to the interest rate differentials.
They have so far mopped up Rs 48,872 worth of stocks in India in September, data made available by NSDL showed. They have been net buyers for the fourth month now.
"Several factors contributed to this rally, including strong corporate earnings, resilient macroeconomic indicators, and increased foreign institutional investor (FII) inflows. The market momentum was further bolstered by a bullish outlook on India's economic growth, supported by expectations of structural reforms and Investor optimism around the Indian economy's ability to withstand global headwinds, such as inflationary pressures and geopolitical uncertainties, added to the positive sentiment," Vikram Kasat, Head - Advisory, PL Capital - Prabhudas Lilladher.
In the absence of domestic cues, the markets are likely to mirror trends in the global indices going ahead.
"We are of the view that, the short-term market texture is still in to the positive side, but due to temporary overbought environments we could see range bound activity in the near future," said Shrikant Chouhan, Head Equity Research, Kotak Securities. (ANI)