Equity benchmarks the Sensex and the Nifty hit their fresh record highs on Friday on gains led by banking, auto and IT heavyweights, including HDFC Bank, TCS and Mahindra and Mahindra, as sentiment remained upbeat tracking positive global cues after recent data signalled China's economy could see a revival.
“Fresh data showed Chinese gauges of retail sales and industrial output for August topped economists' expectations," reported Reuters.
Besides, expectations are getting stronger that major central banks of the world will end their monetary tightening campaign considering the impact of hikes so far on the economy.
The European Central Bank (ECB) hiked its key interest rate to 4 per cent on Thursday. Focus now has shifted to the US Fed meeting outcome on coming Wednesday.
Frontline indices the Sensex and the Nifty hit their fresh record highs of 67,927.23 and 20,222.45, respectively, on Thursday.
Sensex closed at 67,838.63, up 320 points, or 0.47 per cent, while the Nifty settled at 20,192.35, rising 89 points, or 0.44 per cent. Thus, both indices ended at their fresh closing highs.
Mid and smallcaps underperformed the benchmarks. The BSE Midcap index inched up by 0.09 per cent while the BSE Smallcap index rose 0.27 per cent.
As many as 236 stocks, including Axis Bank, Bharti Airtel, HCL Tech, Mahindra and Mahindra, TCS, Tech Mahindra, Wipro and UtraTech Cement, hit their fresh 52-week highs in intraday trade on BSE.
The overall market capitalisation of the firms listed on BSE rose to nearly ₹323.4 lakh crore from ₹322.2 lakh crore in the previous session, making investors richer by nearly ₹1.2 lakh crore in the single session.
For the week, both the Sensex and the Nifty rose almost 2 per cent each. On the flip side, the BSE Smallcap index fell over a per cent and the Midcap index declined by half a per cent for the week ended September 15.
Meanwhile, crude oil prices gained further. Brent Crude traded near the $94 per barrel mark around 3:50 pm.
Out of the total 50 stocks, 32 ended with gains in the Nifty pack. Shares of Bajaj Auto (up 6.29 per cent), Hero MotoCorp (up 2.25 per cent) and Mahindra and Mahindra (up 2.17 per cent) ended as the top gainers in the Nifty index.
On the other hand, shares of BPCL (down 1.60 per cent), Hindustan Unilever (down 1.27 per cent) and Asian Paints (down 1.24 per cent) ended as the top losers in the Nifty index.
Nifty Auto index rose 1.58 per cent, ending as the top gainer among the sectoral indices. Nifty IT (up 0.94 per cent) also saw healthy gains.
Nifty Bank ended with a gain of 0.50 per cent. Nifty Private Bank (up 0.64 per cent) and PSU Bank (up 0.53 per cent) also saw decent gains.
On the other hand, Nifty Oil & Gas (down 0.75 per cent), FMCG (down 0.48 per cent) and Realty (down 0.39 per cent) ended with losses.
Amol Athawale, Vice President - Technical Research at Kotak Securities observed that besides firm global market cues, investors are anticipating a halt in rate hikes by the US Federal Reserve in next week's policy meeting amid moderating inflation, which would augur well for local markets already witnessing a strong upsurge.
"A status quo on rate hikes would further bolster investors' sentiment as this would give a further leg up to the economy in hopes of softening interest rate stance going ahead. A drop in US treasury yields has resulted in a recovery in world equity markets and also had a rub-off effect on local markets," said Athawale.
Vinod Nair, Head of Research at Geojit Financial Services said the market is inching towards a new direction with renewed buying in auto and IT stocks in expectation of strong festive demand and strong deal wins.
"Better-than-expected economic data from China and stimulus hopes further added optimism in global markets. The ECB hinted at a potential pause in rates due to receding inflation, while investors are now focused on central bank meetings next week, with the US Fed, BoE (Bank of England), and BoJ (Bank of Japan) set to announce their rate decisions," said Nair.
Athawale pointed out that on daily and weekly charts, the Nifty has formed a breakout continuation formation which indicates that the uptrend wave is likely to continue in the near future.
"Although the larger texture of the market is bullish, the market is in temporary overbought conditions, and hence we could see some profit booking at higher levels. For short-term traders, 20,075 and 20,000 would act as key support zones while 20,300-20,375 could act as crucial resistance areas for the bulls," said Athawale.
Rupak De, Senior Technical analyst at LKP Securities said the Nifty continued to exhibit strength as the index reached new highs.
"Strong Put writing at 20,100 has further bolstered positive sentiment in the market. The trend is expected to remain positive as long as the Nifty remains above the 20,000 mark. In the short term, there is potential for the Nifty to move towards the 20,480-20,500 range on the upside," said De.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.