A declining trend in Covid-19 cases and strong cues from the global market, including reports of increased fiscal spending, sent the NSE Nifty soaring to a new peak of 15,469.65 on Friday.
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 had hit an intraday high of 51,529.32 and a low of 51,258.69.
Naveen Kulkarni, Chief Investment Officer, Axis Securities, said, “The market is cheering the downward trajectory of the Covid-19 curve as the recovery rate the last few days has outpaced new cases. With the Covid-19 curve flattening, 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’s and Bajaj Finance led the laggards.
RIL recorded the sharpest intra-day gain in over two months and was up 5.99 per cent at closing. Mahindra & Mahindra, which was one of the laggards in the first half, rebounded sharply in the second half of the trading session after the company posted a consolidated profit of ₹163 crore for Q4 of FY21. The company has also announced a dividend ₹8.75 per share for FY21. M&M was up 2.2 per cent on the NSE at closing.
Binod Modi, Head Strategy at Reliance Securities, said, “Domestic equities remained upbeat and recorded fresh highs as improved prospects of economy recovery and strong fourth quarter earnings bolstered investorsentiments. A strong rebound in Reliance Industries was a key driving force today. Notably, the sustained market rally added over ₹3-lakh crore to 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 an improvement in the recovery rate have emboldened investors in the last couple of days. Further, robust Q4 FY21 earnings and favourable commentaries from managements also lifted the sentiment,” added Modi. The market was also aided by the strengthening of the rupee, which ended 15 paise higher at 72.43 to a US dollar.
Vinod Nair, Head of Research at Geojit Financial Services, said: “Constant fall in the US dollar is driving the Indian equity market besides the falling infection rate. The sustenance of the rally is supported by the recent improvement in foreign investment with the stabilising US yield and drop in the dollar index. INR is regularly appreciating against USD.”
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 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. Mid/small
Mid/small-caps rise
Mid- and small-cap stocks saw significant buying activity in early trade. Nifty Midcap 50 hit a fresh high of 7,232.55 while Nifty Smallcap 50 hit a 52-week high of 4,676.05. 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 crossed its previous high, but the long-term structural story is intact for the market. The 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.