No stopping the bulls: Sensex races past 69K, Nifty50 nears 21,000 mark

Adani stocks emerge biggest market driver

Fuelled by optimism about government continuity at the Centre after the 2024 elections, encouraging macroeconomic indicators, and robust buying from foreign portfolio investors (FPIs), Indian equities extended their winning streak to a sixth consecutive session on Tuesday, reaching new heights. 

For the first time, the Sensex crossed the 69,000 mark and ended the session at 69,296, following a gain of 431 points or 0.6 per cent. The Nifty50 index also rose, gaining 168 points, or 0.8 per cent, to close at 20,855. The Nifty’s outperformance was largely due to over 15 per cent surge in Adani Enterprises and Adani Ports & SEZ.

This rally in domestic equities comes at a time when global peers are grappling with uncertainty over interest rate cuts by major central banks and Moody’s downgrade of China’s credit outlook to negative.

Investors are seemingly buoyed by the results of the recently concluded state elections, which have heightened expectations for political stability at the Centre in the coming year. The Bharatiya Janata Party (BJP) emerged victorious in three of the five states, securing a comfortable majority. This outcome exceeded market expectations, as the elections were anticipated to be a closely contested affair in Madhya Pradesh, Chhattisgarh and Rajasthan.

The market mood is also upbeat because of the recently announced GDP numbers for the September quarter. Economic growth of 7.6 per cent during that quarter surpassed the Reserve Bank of India’s estimate of a 6.5 per cent expansion. 

 

Furthermore, the purchasing managers’ index (PMI) for manufacturing rose to 56 in November, up from 55.5 in October, indicating economic expansion.

The combined market capitalisation of BSE-listed companies increased by Rs 3 trillion to Rs 346 trillion, with the Adani group alone adding Rs 1.92 trillion in market cap.

However, global markets faced challenges on Tuesday as hopes of major central banks cutting interest rates were put to the test. Despite these headwinds, markets worldwide rallied amid whispers of peaking rate hikes and signs of slowing inflation and economic growth.

“Tuesday was a follow-up rally on the back of foreign portfolio investors’ (FPIs) and domestic investors’ buying yesterday. Some gains will be given up soon if institutional buying does not continue to be robust as global markets are cautious,” observed UR Bhat, co-founder of Alphaniti Fintech.

FPIs were net buyers of equities worth Rs 5,223 crore on Tuesday, according to provisional data from exchanges; domestic institutions sold shares worth Rs 1,399 crore.

The market’s overall breadth was weak, with 2,031 stocks declining and 1,731 advancing on BSE. Adani Enterprises and Adani Ports, which rose 17.4 per cent and 15 per cent respectively, were the best-performing Nifty stocks. Powergrid Corporation and NTPC, which rose 4.5 per cent and 3.9 per cent respectively, were the best-performing Sensex stocks. More than half of the sectoral indices on the BSE hit new highs, with Power and Utility stocks leading the gains.

“The rotational buying across heavyweights is pushing the Nifty50 to newer highs despite the overbought reading, and it is now heading towards a new milestone of the 21,000+ mark. We recommend focusing on the stocks on the sidelines for some time and are likely to join the move now,” said Ajit Mishra, SVP-technical research, Religare Broking.