Sensex, Nifty close at fresh highs on new Sebi norms on P-notes
Mumbai: Markets continued to set records for the second straight session on Tuesday with both the Sensex and Nifty closing at life-time highs, as investor optimism climbed on corporate earnings season that kicks off later this week.
Regulator Securities Exchange Board of India (Sebi’s) new norms on promissory notes (P-notes) took markets higher, but stocks could not go the whole hog in view of caution due to US Fed’s testimony Wednesday, which is expected to provide timing on balance sheet trimming.
The BSE Sensex gained over 31 points to end at a new peak of 31,747.09. The broader Nifty gained 15 points to finish at fresh record high of 9,786.05, a day after a technical glitch hampered trading on its platform for over three hours.
Market expectations are rife that key macro data such as inflation and industrial production—slated for Wednesday—will be encouraging, which accelerated buying pace on Tuesday.
The BSE 30-share Sensex resumed higher at 31,789.50 and advanced to touch a new all-time intra-day high of 31,885.11, surpassing its previous record of 31,768.39, clocked in Monday’s trade.
It shed much of its early gains on profit-booking towards the fag-end and settled at fresh life-time high of 31,747.09, up 31.45 points, or 0.10%.
The Sensex surpassed its previous record closing of 31,715.64 hit yesterday. In two days, the index has gained 386.45 points.
Similarly, the broader NSE Nifty zoomed past the 9,800- mark for the first time to hit an all-time high of 9,830.05 but failed to maintain record levels on late sell-off, and settled at 9,786.05, up 15 points, or 0.15%. It broke its previous record closing of 9,771.05, hit on Monday after touching an intra-day high of 9,782.15.
“Today’s session started on a positive note owing to cheerful mood across the globe. Subsequently, we saw extension of yesterday’s rally on NSE to reach yet another milestone of 9,800. However, as expected, we witnessed some profit taking at higher levels towards the fag-end to trim major portion of early morning gains. Looking at past couple of day’s action, we believe that the situation is a bit hunky-dory now and traders have started becoming too complacent,” Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking said.
Stocks of some sugar companies were lapped up after the government yesterday raised import duty to 50%, from 40%, to restrict cheap inward shipments and support domestic prices. Major gainers in the sugar space included Dhampur Sugar, Triveni Engineering and Eid Parry, rising by up to 1.03% but a few others gave up initial gains and ended in the negative zone on profit-booking.
“Market touched new high as continued buying by domestic investors in expectation of revival in FY18 earnings despite some volatility in the first quarter. But the pace was not sustained due to US FEDs testimony tomorrow which is widely expected to provide the timing of balance sheet trimming,” Vinod Nair, Head of Research, Geojit Financial Services Ltd said.
Brokers said investor sentiments remained upbeat since the trouble-free rollout of GST on July 1 coupled with steady inflow of buying by Domestic Institutional Investors (DIIs). Further, a firming trend at other Asian markets and a higher opening of European shares tracking gains across the US and Asia as investors kept a close eye on oil prices and looked ahead of new earning season, also boosted sentiments.
However, investors turned cautious towards the fag-end of the session in view of the US Fed’s testimony tomorrow, which is expected to provide timing on balance sheet trimming. In the euro zone, stock exchanges in Frankfurt, Paris and London were up in early trade.
Key indices in the Asian region including Japan’s Nikkei rose 0.57%, Hong Kong’s Hang Seng rose 1.48%, while Shanghai Composite fell 0.30%. Taiwan was up 1.22% and Korea went up 0.58%.
Meanwhile, Domestic Institutional Investors (DIIs) bought shares worth Rs 894.57 crore, while Foreign portfolio investors (FPIs) made purchases to the tune of Rs 102.27 crore on Monday, as per provisional data from the stock exchanges.
Among sectoral index, IT rose the most by surging 0.91%, followed by auto index 0.80%, teck 0.35%, capital goods 0.28%, power 0.24% and oil & gas 0.20%.
Realty, consumer durables, healthcare and PSU sectoral indices ended in the red. Among the Sensex components, 16 ended with gains led by Bajaj Auto (2.44%), Tata Motors (2.28%), NTPC (1.81%), M&M (1.77%), Infosys (1.75%), TCS (1.27%), Hind Unilever (0.49%), L&T (0.41%), PowerGrid (0.40%), HDFC Bank (0.24%), HDFC Ltd (0.20%) and Reliance Industries (0.18%).
Bucking the trend, the broader markets succumbed to profit-booking at record levels by investors, pulling down the midcap index by 0.79% and small cap index by 0.58%.