Sensex, Nifty hit all-time peaks after RBI’s highest-ever dividend announcement

The BSE benchmark climbed 267.75 points or 0.36% to settle at 74,221.06 on May 22. The NSE Nifty advanced 68.75 points or 0.31% to finish at 22,597.80. File

Benchmark equity indices rallied on May 23, with the Sensex and Nifty hitting their lifetime peaks, after the RBI approved the highest-ever dividend of ₹2.11 lakh crore to the government and supported by buying in blue chips Reliance Industries and HDFC Bank.

The 30-share BSE Sensex regained the 75,000 level. It climbed 951.22 points or 1.28% to reach its all-time high of 75,172.28.

The NSE Nifty went up by 308.45 points or 1.36% to 22,906.25 — its record peak.

Among the Sensex firms, Larsen & Toubro, Maruti, Mahindra & Mahindra, Axis Bank, IndusInd Bank, HDFC Bank, Bajaj Finserv, State Bank of India and Reliance Industries were the major gainers.

PowerGrid, Sun Pharma, NTPC and JSW Steel were the laggards.

The Reserve Bank of India will pay a record ₹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 May 22, 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 ₹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 $82 is positive for India’s macros,” Mr. Vijayakumar said. Global oil benchmark Brent crude declined 0.15% to $81.79 a barrel.

The negative for equity markets is the U.S. 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 May 22.

“The Nifty index has surged to a record high after the Reserve Bank of India [RBI] announced a substantial ₹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 ₹686.04 crore on May 22, according to exchange data.

The BSE benchmark climbed 267.75 points or 0.36% to settle at 74,221.06 on May 22. The NSE Nifty advanced 68.75 points or 0.31% to finish at 22,597.80.