 "Sensex closes above 75,000 mark for first time, RIL and ITC gains")
The Indian equity benchmarks ended Wednesday’s session at new highs, buoyed by gains in index heavyweights Reliance Industries and ITC, and optimism over earnings.
The BSE Sensex closed above the 75,000 mark for the first time, ending the session at 75,038 — a gain of 354 points or 0.5 per cent. The NSE Nifty 50 ended at 22,754, up 111 points or 0.5 per cent.
Analysts attributed the bullish sentiment in the domestic equity markets to robust recent macro data and expectations of economic and political stability.
However, sentiment is likely to turn cautious following hotter than expected inflation data in the US, released after Indian market hours, signalling a potential delay in rate cuts by the Federal Reserve. The so-called core consumer price index, which excludes food and energy costs, increased 0.4 per cent in March from February, according to the US Labor Department. From
a year ago, it advanced 3.8 per cent.
Following the report, S&P 500 contracts fell 1.5 per cent and US Treasury 10-year yields advanced 13 basis points to 4.49 per cent.
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“It (the US inflation data) should not have a big impact on our market, but investors will have to live with a higher longer-term interest rate for the short term. A rate cut in June by the Fed is probably off the table, but more data is expected. Even as bond yields rise, the markets are not taking it too badly,” said Andrew Holland, CEO of Avendus Capital Alternate Strategies. The Nifty Midcap 100 also ended the session on a new high of 50,380, a gain of 0.9 per cent, while the Nifty Smallcap 100 posted its longest winning streak ever, equalling its previous 14-session continuous gain in June 2023.
The index has gained 13.6 per cent over the past 14 sessions.
“After the shakeout in mid-March, there was a rally in quality names, which has given confidence back to the market,” said Holland.
Now, the trajectory of the market will be determined by the quarterly earnings, which will begin this week. “The two sectors everyone is looking at are IT and banking. If an IT company’s commentary says the worst is over, it will trigger a rally. And if banks say the NIM (net interest margin) compression is behind them, it will give a lot of confidence. And if banks continue their rally, that could be the extra leg markets need because of banks’ weighting in the index,” Holland explained.
The market breadth was neutral, with 1,904 stocks advancing and 1,939 declining on the BSE. More than two-thirds of Sensex stocks gained. ITC, which rose 2.5 per cent, was the best-performing Sensex stock, followed by Kotak Mahindra Bank, which rose 2.4 per cent. Foreign portfolio investors were net buyers worth Rs 2,778 crore, and domestic institutions bought shares worth Rs 163 crore.
“Overall, we expect the market’s ongoing uptrend to continue, with the Nifty being just 265 points away from crossing the 23,000 mark. The broader market, too, is likely to continue its outperformance, along with stock-specific action, on the back of strong domestic flows and healthy business updates,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services.