 "Sensex winning run extends to 11th consecutive session, first since 2007")
The benchmark Sensex on Friday rose for an 11th consecutive session -- its longest winning streak since 2007. The 30-share index rose 320 points, or 0.5 per cent, to settle at 67,839, surpassing its previous lifetime closing high made on July 20.
After hitting an intraday high of 20,222, the Nifty50 ended the session at a fresh peak of 20,192, capping its third straight weekly gain.
A combination of strong domestic inflows, optimism around corporate earnings growth, and macroeconomic outlook has propelled the domestic markets this month.
Previously, the Sensex gained for 11 sessions in a row only on three occasions. During the peak of the 2007 bull market, the index surged 15 per cent in 11 trading sessions, also in September. This time, it has been a slow crawl for the market, with daily gains between 0.1 per cent and 0.86 per cent.
The Sensex was in the green in each of the trading sessions this month, even as foreign portfolio investors (FPIs) net sold shares worth nearly Rs 5,000 crore. Domestic institutional investors provided a solid counterbalance to FPI outflows. DIIs have been net buyers to the tune of Rs 8,292 crore in September.
Analysts said investor morale remains high amid better domestic macroeconomic data and corporate earnings numbers.
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“The food inflation is under control in India. Industrial growth is healthy, and the services economy is booming. The first quarter results were healthy, and the second quarter is expected to be in decent shape. During global economic distress, India's economic indicators are one of the strongest. Domestic flows are buoyant. FPIs are largely optimistic on India, except for occasional bouts of profit-taking,” said Saurabh Mukherjea, founder of Marcellus Investment Managers.
In a note to investors, Motilal Oswal said expectations of high-teen earnings CAGR (compound annual growth rate) over FY23-25E have kept sentiment buoyant.
“We reckon the upside from here will be a function of stability in global and local macros, and continued earnings delivery versus expectations,” the note said, underscoring the markets are at an all-time high but not valuations.
Improving global cues on account of better-than-expected economic data in China and hopes of soft-landing and peaking rates in the developed world also aided sentiment.
In August, industrial production and retail sales in China rose from a year earlier, and the urban jobless rate eased, fuelling hopes that stimulus measures are working. Moreover, expectations are rising that central banks in the developed world have reached the end of the rate hikes.
The European Central Bank (ECB)on Thursday raised rate hikes for the 10th consecutive time, leading to speculation that deposit rates have peaked in the present tightening cycle.
However, ECB President Christine Lagarde, in her statement Lagarde, said sufficient contributions had been made to achieve targeted inflation in a timely manner but one cannot conclude that rate hikes have peaked yet.
"The domestic markets have been resilient, and global markets have also risen. It's more to do with momentum now than anything else,” said Andrew Holland, CEO of Avendus Capital Alternate Strategies.
The market breadth was mixed, with 1,869 stocks rising and 1,778 declining on the BSE. Two-thirds of Sensex stocks rose. HDFC Bank, which rose 1.24 per cent, contributed the most to index gains. The gain in HDFC Bank's shares was attributed to passive fund flows after a rejig of some key indexes.
Investors now will be keenly tracking the Federal Reserve's monetary policy outcome next week.