The BSE Sensex gained 0.52% or 371.95 points to close at 72,410. The Nifty advanced 0.57%, or 123.95 points, to close at 21,778.
Analysts attributed the recent market strength to stability in global equities, prompting traders to cover their bearish wagers.
“Retail traders covered their short positions on expiry of December contracts today because of the unusual rally this month along with sustained rally in the US markets,” said Shrikant Chouhan, executive VP, Kotak Securities. “The fall in US bond yields and dollar index below 101 are also positive for the markets.”
Foreigners net bought shares worth ₹4,358.99 crore on Thursday, while their domestic counterparts were sellers to the tune of ₹136.64 crore.
The Sensex and Nifty have risen 1.5% in the past eight trading sessions and 8% in the past month.
Analysts expect the market to continue its record-breaking run but advise caution.”The Nifty is on the way to 22,000-22,200 in the first part of January,” said Sriram Velayudhan, VP – alternative research, IIFL Securities. “The highlight of the December expiry is the rise in the roll costs to an annualised 11% (as against an average of 7-8%), which suggests aggressive rollover of long positions and is pointing to excesses in the market.”
Velayudhan said the recent surge in the Volatility Index (VIX) from 12 to over 15 suggests some traders are hedging their stock portfolios.
