Indian equity benchmarks hit record highs for the second consecutive session on Thursday as strong macro indicators as well as firm global cues lifted appetite for riskier assets. So far in December, the BSE Sensex has zoomed more than 5,400 points, and the NSE Nifty has gained over 1,600 points, propelling both benchmark indices to multiple record highs during this period. The cumulative market capitalisation of BSE-listed companies hit a record high of ₹366 lakh crore ($4.4 trillion) at the close of trade on Wednesday, adding over ₹27 lakh crore to their combined market value in the month of December.
Extending rally for the fifth straight session, the 30-share BSE Sensex surged 368 points to touch a new lifetime peak of 72,406.75 in intraday trade today, and the Nifty climbed 104.3 points to scale a fresh high of 21,759.05.
The market witnessed broad-based buying on the last monthly expiry of the year, with BSE Midcap and Smallcap indexes rising up to 0.4%. The market breadth, indicating the overall strength, was slightly negative, with 1,889 shares advancing while 1,937 were declining on BSE. The India VIX (Volatility Index) rose 2.2% to touch a nine-month high of 15.9, indicating fear of higher volatility in the market.
"The rally looks set to continue supported by the leading banks which are witnessing institutional accumulation. Strong cues from the mother market U.S., steadily declining U.S. bond yields and the dollar index below 101 augur well for the continuation of the rally. It is important to note that high quality large caps have taken the leadership in this rally which has taken the Sensex above 72K,” says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“A significant market indicator is the volatility index VIX rising above 15. Investors should take this as an indication of high volatility ahead. Remaining invested is important in a bull market. But chasing the market at high valuations would be highly risky," Vijayakumar says.
On the sectoral front, all indices were flashing in green, except IT and Teck, led by oil and gas and PSU space. The IT and Teck stocks witnessed profit booking as investors took some breather after recent strong rally amid rising optimism over dovish policy stance by key central banks.
The top performers on the BSE Sensex pack were NTPC, Nestle India, Power Grid Corporation of India, Tata Motors, and Reliance Industries, which gained in the range of 1% to 2.5%. On the other hand, UltraTech Cement, Infosys, Maruti Suzuki India, Asian Paints, Larsen & Toubro were among the top laggards, falling up to 1%.
Among individual stock, aerospace and defence company Azad Engineering made a debut today, with the share price listing at ₹720 apiece on the NSE, a premium of 37.4% over the IPO price of ₹524. Post debut, Azad Engineering shares touched an high and low of ₹727 and ₹701, respectively on the NSE.
On Wednesday, the Sensex rose 701.63 points to settle at its all-time closing high of 72,038.43, and the Nifty50 jumped 213.40 points to end at a record high of 21,654.75. The market rally was driven by strong cues from Wall Street and Asian markets, continued decline in U.S. bond yields, as well as foreign fund inflows. Foreign Institutional Investors (FIIs) turned buyers on Wednesday with net equity investment of ₹2,926 crore, according to exchange data.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, says Indian markets are showcasing bullish fervor across the board. Banking stocks have experienced a notable surge, and the Nifty Bank has surpassed 48,300. There has been a significant upswing in IT stocks, with TCS, HDFC Bank, and Infosys emerging as the top contributors to the Nifty's positive movement.
“Nifty has bullish momentum; it has crossed 21,500–21,600 zones, which act as key resistance zones. Now we can expect a move towards 21,800/22,000. 21,500 is a key support level; below this, we can expect pressure towards the 21,325 level,” says Gour.
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