It was a historic day for the stock market, with most key indices hitting record levels.
While the Nifty closed above the 9,300-mark to set a new record, Nifty Bank breached the 22,000-level for the first time. Nifty Midcap also hit its all-time high on Tuesday.
Expectation of a broader recovery in corporate performance, following Reliance Industries’ (RIL) impressive showing in the March 2017 quarter, and global cues have created bullish sentiments that saw the Nifty move up about 1 per cent to close at 9,306.60, and S&P BSE Sensex come close to the 30,000-mark; the benchmark closed the day at 29,655.84. The rally in banking stocks also helped to lift the market.
Kunj Bansal, Executive Director and Chief Investment Officer – Equity, Centrum Wealth Management, said
Benchmark indices have gained 14 per cent so far this year, helped by stocks such as RIL, Larsen and Toubro, HDFC Bank, State Bank of India, Maruti Suzuki and ITC. These stocks, which have considerable weight in the benchmark indices, have gained in the range of 15-31 per cent. Market experts expect Nifty to continue its robust momentum.
“We feel this momentum will extend further and expect Nifty to test 9,400 shortly. The best part is that most sectors are participating in the rally and our preferred sectors — banking, auto and select NBFCs — are leading from the front,” said Jayant Manglik, President, Retail Distribution, Religare Securities. However, others are worried about the stretched valuations, based only on growth expectations and money inflows (foreign as well as domestic).
So far in 2017, foreign institutional investors have pumped in close to ₹42,000 crore, while domestic institutional investors, led by mutual funds, have invested ₹6,600 crore.