Bulls shatter multiple records today as Sensex, Nifty soar to new highs2 min read . Updated: 03 Aug 2021, 05:26 PM IST
- Sensex and Nifty today came out of a two-month long period of consolidation to push Indian stock markets to new highs
Helped by positive macro news flows on GST and export data, Indian stock market indices Sensex and Nifty finally ended their 2-month long consolidation phase, with both the benchmark hitting new highs today. The NSE Nifty 50 index hit a new milestone of 16,000 levels before ending up 1.55% at 16,130 while BSE Sensex rose nearly 900 points to 53,823.36.
The broader markets however underperformed with BSE midcap and smallcap indices ending moderately higher but both the indices hit new highs during today's trade.
Analysts say that what really provided support to the market was the Q1 FY22 earnings report which begun on a very healthy note despite the Covid 2.0 impact.
"Management commentaries across the board suggest an improved demand environment post June'21, led by the easing of restrictions, lower active COVID-19 cases, and a pickup in vaccinations. We estimate corporate earnings to continue to recover, as the underlying economy opens up, with progressively higher vaccination trends, thus offering many bottom-up opportunities," said Sneha Poddar, AVP – Research, Broking & Distribution, Motilal Oswal Financial Services.
"Markets have resumed trend after two months of the range-bound move so it’s unlikely to fade away anytime soon. However, the participation of the banking index would be the critical factor as that would decide the pace of rising from hereon. Nifty has the potential to test 16,300+ zone now. Traders should align their positions accordingly," said Ajit Mishra, VP - Research, Religare Broking.
Arun Malhotra, founder & CIO, CapGrow Capital Advisors, remains cautious on broader markets. "Markets are buoyant and the large caps have started moving up. Majority of the buoyancy in the last 3 months have been witnessed in small and midcaps that are due for correction. The Q1Fy22 results have been decent and will keep the market steady. A shift from small cap to large caps seems to be the trade right now," he said.
HDFC Ltd and Titan Company Ltd were top gainers on the Nifty 50 index, adding 3.8% and 3.9%, respectively. The fast-moving consumer goods sub-index rose 1.73% and Nifty finance index gained 1.68%.
Deepak Jasani, Head of Retail Research, HDFC Securities, said: "Nifty brushed past through 16000 levels easily and closed higher. However volumes and AD ratio (equal on such a day) do not give confirmatory signals. However momentum is in favour. Hope that India will be a beneficiary of the recent troubles faced by China is keeping sentiments upbeat. While valuations seem high, there is no point in pre-empting a top, but rather wait for signs of medium term change in trend."
The short term trend of Nifty seems to have turned up sharply, say analysts. "The much awaited upside breakout of broader high low range at 15960 could signal more upside for the Nifty ahead. The next upside levels to be watched around 16300-16500 in the next 6-8 sessions. Important support is placed at 15960-16000 levels," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
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