Mumbai: Equity markets set new records on Thursday, which the benchmark BSE Sensex index crossing the psychologically important level of 38,000 points.

However, the rally itself was weak, and driven by a few stocks.

The 30-share Sensex closed 0.36% or 136.81 higher at a record 38,024.37 points, while the National Stock Exchange’s 50-share Nifty rose 0.18% to 20.70 points to a record close of 11,470.70 points.

Earlier in the day, the Sensex rose as much as 0.50% to touch a record 38,076.23 points, while the Nifty climbed 0.39% to a record 11,495.20 points.

It took the Sensex a mere nine sessions to sprint from 37,000 points to 38,000 points. “Markets are gradually moving higher, without giving much importance to the global issues, be it escalation of trade war or currency fluctuation," said Jayant Manglik, president, Religare Broking Ltd.

“It shows that participants are focusing mainly on the earnings, which are largely in line with street expectations and even surpassed in some cases. Also, we’re seeing rotational buying across the board, adding to the market resilience," said Manglik.

Radhika Gupta, chief executive officer, Edelweiss Asset Management Ltd, too, saw a revival in corporate earnings.

“On the brighter side, we are seeing corporate earnings turn around. We are at the beginning of a corporate earnings cycle pick-up. If that continues, we will see a broader participation in the rally," Gupta said.

Early trends from corporate earnings for the June quarter indicate a revival in consumption demand as the economy recovers from the impact of the roll-out of the goods and services tax, Mint reported on 27 July.

A Mint analysis of 102 listed companies showed that aggregate net profit, after adjusting for one-time gains and losses, rose 14.3% in the fiscal first quarter, the highest in nine quarters.

Also, foreign institutional investors who have stayed off the market have shown renewed interest and have been net buyers of Indian shares for three of the first five trading sessions this month.

Concerns on the limited breadth of the rally remain, even as mid-cap and small-cap stocks, which were correcting earlier, have started their upward trajectory once again.

“If you look at Nifty companies, only a few of them have rallied. It is a rally with limited breadth, and that is challenging," said Gupta of Edelweiss Asset Management said.

Interestingly, while the Sensex scaled a record high on Thursday, none of its components touched even a 52-week high in the day.

From Mid-July to till date, while the Sensex has gained 4.73%, the BSE mid-cap and small-cap indices have gained 8.56% and 7.09%, respectively.

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