The benchmark BSE Sensex fell back after scaling a lifetime high on the last day of the Hindu Samvat year 2069 and still ended at a fresh closing record today with a 32-point gain amid continued foreign fund buying and renewed optimism about the economy.
The index climbed to an all-time high of 21,293.88 in intra-day trade, surpassing the previous record of 21,206.77 reached on January 10, 2008. It ended at 21,196.81, a gain of 32.29 points or 0.15 per cent.
The markets gained for the fourth day in a row after the Reserve Bank of India on Tuesday increased the repo rate to curb inflation and also improved liquidity for banks.
The US Federal Reserve's decision this week to continue with its bond-buying stimulus programme eased concerns about foreign funds pulling out capital from emerging markets.
Overseas investors were net buyers for the 20th straight day, purchasing Rs 1,875.87 crore of shares yesterday, according to provisional data from the stock exchanges.
"All one can say is liquidity is driving the markets. And what is creating the liquidity surge? It is the expectation over the elections results, no tapering in the Fed's bond-buying programme and finally, the expectation that interest rates may have peaked," said Milan Bavishi, Head of Research at Inventure Growth and Securities.
The Sensex has gained 626.53 points, or 3.05 per cent, in the past four sessions.
The 50-share CNX Nifty on the National Stock Exchange moved up 8.05 points to 6,307.20 today. The SX40 on the MCX Stock Exchange ended at 12,585.49, up 40.36 points.
Finance Minister P Chidambaram today said the current account deficit is under control and the fiscal deficit target will be met. He said export growth is expected to continue and a bumper harvest is likely after the good monsoon.
The minister acknowledged that the market seemed happy but he cautioned investors against excessive exuberance.
While increased capital inflows driven by attractive corporate earnings boosted buying, some investors chose to book profits after the recent gains, brokers said. Auto shares saw buying on robust sales growth in