The Nifty index has surged to a record high after the Reserve Bank of India (RBI) announced a substantial Rs 2.1 lakh crore dividend to the government, Santosh Meena, Head of Research at Swastika Investmart Ltd, said.
Benchmark equity indices rallied on Thursday, with the Nifty hitting its lifetime peak and the Sensex climbing over 800 points after the RBI approved the highest-ever dividend of Rs 2.11 lakh crore to the government and supported by buying in blue chips Reliance Industries and HDFC Bank.
The NSE Nifty went up by 262.85 points or 1.16 per cent to 22,860.65 -- its record peak.
The 30-share BSE Sensex regained the 75,000 level. It climbed 844.3 points or 1.13 per cent to 75,065.36. The 30-share benchmark index is just 60 points away from its all-time high level.
Among the Sensex firms, Larsen & Toubro, Axis Bank, IndusInd Bank, Maruti, Mahindra & Mahindra, HDFC Bank, Bajaj Finserv, State Bank of India and Reliance Industries were the major gainers.
Sun Pharma, PowerGrid, NTPC and JSW Steel were among the laggards.
The Reserve Bank of India will pay a record Rs 2.1 lakh crore dividend to the government for the fiscal ended March 31, more than double of budgeted expectation, helping shore up revenue ahead of a new government taking office.
The RBI board, at its 608th meeting on Wednesday, approved the transfer of surplus, the central bank said in a statement.
"There are positives and negatives for the market today. The biggest positive is the record Rs 2.11 lakh crore dividend from the RBI to the government," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
This means the government can reduce its fiscal deficit and step-up infrastructure spending, he added.
"Brent crude dipping below USD 82 is positive for India's macros," Vijayakumar said. Global oil benchmark Brent crude declined 0.15 per cent to USD 81.79 a barrel.
The negative for equity markets is the US Fed meeting minutes which indicate concern over the stubbornness of inflation, he noted.
In Asian markets, Tokyo traded in the green while Seoul, Shanghai and Hong Kong quoted lower.
Wall Street ended in negative territory on Wednesday.
"The Nifty index has surged to a record high after the Reserve Bank of India (RBI) announced a substantial Rs 2.1 lakh crore dividend to the government. This development is a significant macroeconomic positive for the market, with direct implications for the fiscal deficit and bond yields," Santosh Meena, Head of Research at Swastika Investmart Ltd, said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 686.04 crore on Wednesday, according to exchange data.
The BSE benchmark climbed 267.75 points or 0.36 per cent to settle at 74,221.06 on Wednesday. The NSE Nifty advanced 68.75 points or 0.31 per cent to finish at 22,597.80.