India's benchmark share index surged to a new closing high on Thursday, tracking global gains and powered by cheaper crude oil and strong foreign fund flows. Federal bonds rose as the sharp slide in crude oil prices led to hopes that fuel-price-led inflationary pressures would ease. The Mumbai Stock Exchange index leapt above the 6,300-mark to a new intraday high of 6,335.14 points before ending 1.62 percent higher at 6,328.43. The index is now up 8 percent in 2004.
"The strong foreign fund flow is keeping the momentum going, and the cheaper crude oil prices are another positive," said Ajit Sanghvi, director of MSS Securities.
"The stronger rupee may be a concern for tech stocks, but the old economy stocks are all in favour, and the rally could be sustained as long as funds keep coming in."
Foreign funds bought a record $1.4 billion worth of Indian shares in November, compared to $876 million in October.
Refiners were helped as US crude oil prices dropped to below $45 a barrel on Thursday on increased supplies. State-run Indian Oil Corp, the biggest refiner, rose 6.8 percent, while Bharat Petroleum Corp Ltd leaped 8 percent.
Auto makers, amid strong November sales, rose on hopes of firmer prices. Top car maker Maruti Udyog Ltd rose 4.4 percent and bus and truck maker Ashok Leyland Ltd gained 3.2 percent.
But Infosys, India's second-largest software service exporter, slipped 1.2 percent as the rupee surged.
The rupee closed at 44.1050/1250 per dollar, its strongest finish since 44.0350/0450 on April 23. Traders said the currency slid off the day's peak of 44.05 due to central bank intervention and the announcement of a $500 million investment limit on foreign funds' purchases of local corporate debt.
The rupee closed at a fresh seven-month high, helped by the influx of foreign capital and export receipts, gaining nearly 0.8 percent and extending its rally into a sixth session. The rupee has now gained 5.3 percent in the last four months after slumping to a 13-month closing low of 46.4500/4650 on July 29. It has appreciated 3.4 percent since the start of 2004.
In the debt market, the yield on the active 7.38 percent 2015 bond fell 7 basis points to 6.7945 percent.