Robust domestic economic growth, easing consumer price inflation and strong foreign inflows pushed the benchmark indices to new highs on Wednesday.
While the Nifty hit an all-time high of 19,011.25, breaching the 19,000-mark for the first time, the Sensex also crossed the 64,000-mark during the day. At close, the Sensex was up 499.39 points or 0.79 per cent at 63,915.42, and the Nifty was up 154.70 points or 0.82 per cent at 18,972.10. Even Nifty Bank made a new high of 44508.40.
The gains were broad-based as all the sectoral indices, led by Nifty Pharma, Nifty Metal and Nifty Oil & Gas, ended in the green except Nifty Media. Both midcaps and smallcaps edged up while the Nifty500 and Nifty 200 indices registered their new year peak.
FPI action
According to the exchange’s provisional data, foreign portfolio investors (FPIs) mopped up stocks worth ₹12,350 crore on the day, the highest since March 2. Including this, FPIs have net bought about ₹46,000 crore worth of equities in June so far.
“Indian markets had a memorable day today, with a broad-based market rally... All sectoral indices ended in the green, triggered by positive news flows surrounding the HDFC-HDFC Bank merger and robust current account deficit data for the fourth quarter,” said Riches Vanara, Technical And Derivatives Analyst, Stoxbox.
“The delay in monsoon and the possible onset of the El Nino... is triggering caution among policymakers. However, the economic activity has held up well so far in Q1 FY24 and there is increased optimism on the domestic economy,” said Mitul Shah — Head of Research at Reliance Securities.
Global markets also rallied after the US economic data indicated resilience of that economy despite a higher interest rate environment. The S&P 500 closed 1.1 per cent higher on Tuesday, while the Nasdaq rose 1.6 per cent, both rebounding from two successive sessions of declines.
Next support
“The short-term trend of Nifty continues to be positive. Having surpassed above the crucial overhead resistance of 18,900 levels on Wednesday, there is a possibility of more upside towards 19,100-19,200 levels in the next few sessions before shifting in to consolidation/minor weakness from the highs. Immediate support is at 18,830 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Global investment advisory, CLSA, which downgraded India to underweight, said there is no hurry to upgrade the weightage. “Relative valuations, though less extreme, remain very unappealing. For the 16 years from 2004 through end-2019, Indian equities traded on an average 35 per cent premium multiple versus overall emerging markets on 12-months forward consensus sector-adjusted earnings. Since 2020, that premium has averaged 80 per cent which is where the market is currently trading,” it added.