Positive global cues and persistent foreign fund inflows have pushed Indian markets to new highs
Banking, auto stocks lead gains today
Indian shares closed at a record high today, boosted by a rally in automotive and banking shares. Recovering from early lows, the Nifty 50 hit a record intra-day of 12,948 before closing at 12,938, a gain of 0.5%. The blue-chip NSE Nifty 50 index has climbed 11% this month alone, mirroring a global advance in shares as Pfizer and Moderna's promising COVID-19 vaccine trial results boosted hopes of a quicker return to economic growth.
The BSE Sensex jumped 227 points to finish above the 44,000-mark for the first time on Wednesday, amid strong foreign fund inflows. After touching its lifetime intra-day high of 44,215.49, the 30-share BSE benchmark ended 227.34 points or 0.52 per cent higher at its record closing of 44,180.05.
"Volumes on the NSE continued to be high. Global shares were subdued on Wednesday as soft U.S. retail sales fuelled worries that rising coronavirus cases could choke a still fragile economic recovery, dampening the euphoria from vaccine trial breakthroughs," said Deepak Jasani, Head of Retail Research, HDFC Securities.
"Nifty closed at an all time high once again. Going by the momentum, 13200-13280 mark on the Nifty could be reached soon."
Automotive stocks gained 3%, led by a roughly 10% jump each in Tata Motors and Mahindra and Mahindra amid expectations of strong vehicle sales during India's festive season that culminated with Diwali this week.
State-run lenders rallied and the index tracking them climbed 3.6%,. State Bank of India jumped 4.9%.
On the Nifty 50, construction firm Larsen & Toubro gained 6.2%. Elsewhere, Lakshmi Vilas Bank fell 20% after India placed the troubled lender under a moratorium.
Here is what analysts said on today's market performance:
Ajit Mishra, VP - Research, Religare Broking Ltd
"Markets have been maintaining the momentum despite overbought conditions and it’s largely due to noticeable buying by foreign investors. We reiterate our positive yet cautious approach to the index and suggest focusing on broader markets for trading opportunities. Needless to say, traders should avoid contrarian trades and maintain a “buy on dips" approach."
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
“Nifty continues to trade with a positive bias scaling new highs. We strongly believe the medium term trend is positive and any meaningful correction is an opportunity to Buy. We currently are in a “frothy" zone from the short term perspective and hence need to be selective. Since the recent rally has been vertical and quick not all sectors provide comfortable entry points. We believe currently, Auto, Gas related stocks and select PSU Banking can be looking into. Metals and Private banking can be accumulated only on corrections."
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
"The index was subdued for most of the day but moved up smartly in the last couple of hours. We inched closer to the magical 13000 levels but could not clinch it. It is only a matter of time that we see the Nifty trading at those levels. 13000-13100 is the next potential target but can also prove to be a stiff resistance for the markets." (With Agency Inputs)
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