Indian shares jumped to their highest-ever trading level Sunday in ceremonial trade to mark the Hindu festival of Diwali. The Bombay Stock Exchange benchmark Sensex hit 21,321.53 points in evening trade, beating the previous high of 21,293.88 points set on Friday. The rally was led by strong foreign fund inflows and an easing of both global and domestic economic concerns.
Auto and power stocks were gainers in Sunday's trade. The Sensex retraced on profit taking to end at a new record close of 21,239.36 points.
The stock markets were open for a 75-minute token "Muhurat" (auspicious beginning) trading session late in the evening.
Traders buy stocks to seek blessings from the Hindu goddess of wealth Lakshmi, in hopes of prosperity in the coming trading year. Sentiment has been improving across Asian markets over hopes that the US central bank may delay plans to start tapering its massive stimulus programme.
India's market has been sluggish for most of 2013 due to an outflow of foreign funds over fears of an end to the US programme, while the country's slowing economic growth, weak rupee and high trade deficit also weighed.
But with global and domestic fears beginning to ease, investments are starting to flow in again. "The markets are liquidity driven, but have risen too fast, too soon. Concerns over the rupee remain," said Hemen Kapadia, vice-president with brokerage K.R. Choksey Shares and Securities.
The rupee, which was one of the worst performing Asian currencies this year, has started to stabilise, gaining more than 10 percent against the dollar from its record low of 68.85 in August.
Foreign funds pumped $2.55 billion into Indian equities in October, taking their total purchases to $16.48 billion for 2013, regulatory figures showed Friday.
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