Benchmark indices rallied through the day as the new series in the F&O segment began, with NSE’s Nifty scaling new peak, recording a fresh all-time high of 15,469.65.
A declining trend in Covid-19 cases and strong cues from the global market including reports of increased fiscal spending has positively impacted market sentiment. Market rallied through the day ahead of the crucial GST council meet held today.
The Nifty 50 recorded a fresh closing high of 15,435.65, up 97.80 points or 0.64 per cent. It hit an intraday low of 15,394.75. The BSE Sensex closed at 51,422.88, up 307.66 points or 0.60 per cent. It hit an intraday high of 51,529.32 and a low of 51,258.69.
The breadth of the market, however, was in favour of the decliners with 1,699 stocks declining, 1,433 stocks advancing and 146 remaining unchanged on the BSE. As many as 374 securities hit the upper circuit and 228 the lower circuit; 339 hit their 52-week high while 35 touched a 52-week low.
Naveen Kulkarni, Chief Investment Officer, Axis Securities. said, "The market is cheering the downward trajectory of the Covid-19 curve as the recovery rate since the last few days has been faster compared to the new cases. With the improvement in the Covid-19 curve, India is playing catch-up with the global market, with broader market outperformance seen during the month, in which smaller companies have outperformed the large caps.”
RIL, M&M rebound
Reliance, Adani Ports, Grasim, Mahindra & Mahindra and Coal India were the top gainers on the Nifty 50 while Sun Pharma, Shree Cements, Bajaj Finserv, Dr Reddy and Bajaj Finance were the top laggards.
RIL witnessed the sharpest intra-day gains in over two months and was up 5.99 per cent at closing. Mahindra & Mahindra which was one of the top laggards in the first half also rebounded sharply in the second half after the company posted a consolidated profit of ₹163 crore for Q4FY21. The company has also announced a dividend ₹8.75 per share for FY21. M&M was up 2.2 per cent on NSE at closing.
Binod Modi, Head Strategy at Reliance Securities, said, “Domestic equities remained upbeat and recorded fresh high as improved prospects of economy recovery and strong Q4FY21 earnings continued to bolster investors’ sentiments. A strong rebound in Reliance Industries was a key driving force today. Notably, sustained market rally added over ₹3 trillion in investors’ wealth this week and aided market capitalisation of domestic equity to cross landmark $3 trillion during the week. “
“Notably, a sharp drop in daily caseload in second wave (remaining below 2 lakh despite higher testing) and improvement in recovery rates have emboldened investors in in last couple of days. Further, robust Q4FY21 earnings and favourable commentaries from managements also lifted sentiments,” added Modi.
Market was also aided by strengthening Indian rupee which ended 15 paise higher at 72.43 per US dollar.
Vinod Nair, Head of Research at Geojit Financial Services, "Constant fall in US dollar is driving the Indian equity market in addition to the falling infection rate. The sustenance of the rally is supported by the recent improvement in foreign investment with the stabilizing US yield and drop in the dollar index. INR is regularly appreciating against USD."
Pharma under pressure, IT erases gains
On the sectoral front, pharma stocks remained under pressure through the day. All indices, except Nifty IT, Nifty Pharma and Nifty Media closed in the green. Nifty IT has surrendered initial gains to end 0.15 per cent lower. Nifty Pharma was down 1.18 per cent at closing.
Nifty PSU Bank recorded the highest gains and was up 0.67 per cent.
Broader stocks lose momentum
Broader markets lost momentum later in the day after rallying in the early trade. Midcap and smallcap stocks also witnessed significant buying activity during the early trade. Nifty Midcap 50 recorded fresh high of 7,232.55 while Nifty Smallcap 50 hit a fresh 52-week high of 4,676.05.
However, broader stocks witnessed selling pressure in the second half. Nifty Smallcap 50 was down 0.67 per cent at closing. Nifty Midcap 50 was up 0.35 per cent.
The S&P BSE Midcap was down 0.12 per cent while the S&P BSE Smallcap was down 0.48 per cent.
Notably, the volatility index softened 12.78 per cent to fall below 18 at 17.37.
“We could see some profit booking, as today's market has crossed its previous high, but the long term structural story is intact for the Indian market. Broader market looks attractive at the current level and the sector rotation will play a crucial role to generate alpha in the near term," said Kulkarni.