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Home >Markets >Stock Markets >Sensex today surges 500 points to new closing high. Analysts eye higher levels

Indian stock market benchmarks Sensex and Nifty finished at record closing highs after data showed a smaller-than-expected contraction in Asia's third-largest economy in September quarter. Hopes for a COVID-19 vaccine also boosted the sentiment in Indian markets that had climbed 11% in November. The Nifty 50 index today closed up 1.08% at 13,109.05, while the benchmark Sensex climbed over 500 points to 44,655.44.

"Nifty is not very far from its recent all-time high of 13146 and going by the recent momentum it does not look tough for the Nifty to touch/breach it. On falls 12987 could provide support. We are seeing stocks that have underperformed so far coming into favour and this rotation continues," said Deepak Jasani, Head of Retail Research, HDFC Securities.

Data released on Friday showed India's economy contracted by 7.5% in the September quarter, versus an 8.8% contraction expected in a Reuters poll.

Heavyweight IT firm Infosys jumped 3.3% while private-sector lender ICICI Bank Ltd jumped 2.5%. Among other Sensex stocks, Sun Pharma, IndusInd Bank and Tech Mahindra rose between 4% and 5.5%. India's most valuable company Reliance Industries Ltd rose 1.3%.

The broader markets too remained buoyant and ended with gains in the range of 0.8-1%.

Here is what analysts said on today's market performance:

Vinod Nair, Head of Research at Geojit Financial Services

"The markets started December trading on a strong footing raising the benchmark to a fresh high due to a good GDP data. The Manufacturing PMI released today showed a slight contraction in manufacturing activities compared to the previous month, though growth remained strong. Markets across the globe made a positive start to the month expecting an extension of November’s record-breaking gains along with strong hopes of coronavirus vaccine. We believe that this optimism can sustain in the near term with a shift towards mid and small caps, led by lag effect."

Ajit Mishra, VP - Research, Religare Broking Ltd

"After a flat start, the benchmark gradually inched higher as the session progressed and settled around the day’s high. Amid all, healthy buying was witnessed in sectors such as pharma, IT and real estate. The upmove in the index was largely in reaction to the better than expected GDP numbers and consistency in GST revenue figures. Now, all eyes would be on RBI’s monetary policy meet. Considering the impending event, we reiterate our positive yet cautious approach and suggest maintaining focus on the selection of stocks."

Sumeet Bagadia, Executive Director, Choice Broking.

"Nifty faces resistance at 13145 levels and breakout above that level may continue the upside rally towards 13300/13500. However, support in the Nifty is shifted up to 12820-12900 levels."

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

“Positive global cues and strong buying interest from FIIs helped the markets maintain its upward momentum. The dollar index is weakening and it is now at the lowest point of the last two years, which is positive for emerging markets and especially for Indian markets. It has attracted the highest inflows for Indian equities out of total inflows for emerging markets. The most important part is that the broader market is improving, which is extremely positive for retail investors which are used to invest in mid-cap and small-cap companies. The market has formed a bullish continuation formation and based on the daily chart it is heading for 13200/13300 levels in the near term. We need to be more and more selective in terms of trading in stocks. On the flip side, 12790 would be crucial support for the market."

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