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Gaining for a fifth straight day, the benchmark National Stock Exchange Nifty50 hit a new record high on Monday, aided by gains in financials and energy stocks. The 50-share blue chip company index ended the session at 22,122.25, with a gain of 81.6 points, or 0.4 per cent. It surpassed its previous all-time closing high of 22,097.5 on January 15. This is the third time on a closing basis and the sixth time on an intraday basis that the Nifty50 index has reached a new high.
Meanwhile, the 30-share S&P BSE Sensex closed at 72,708, with a gain of 282 points, or 0.4 per cent. The index is still 620 points away from surpassing its record closing high of 73,328 on January 15.
The combined market capitalisation (mcap) of BSE-listed stocks rose by Rs 2.16 trillion, reaching a new high of Rs 391.7 trillion ($4.72 trillion). Market players are now eyeing key milestones of Rs 400 trillion and $5 trillion in mcap.
In the past five trading sessions, the domestic market has gained 2.3 per cent, underperforming its Asia and emerging market peers by nearly 100 basis points.
The latest gains in global equities come even as investors have pared bets on early rate cuts by the US Federal Reserve (Fed) following higher-than-expected inflation data.
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“Despite a mid-week swoon on the back of hotter-than-expected US inflation data, global share markets are mostly up, helped by solid US profit results and expectations that central banks will still cut interest rates this year,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote in a note.
The broader market, Nifty Midcap 100, and Nifty Smallcap 100 rose 0.4 per cent each. Last week, the broader markets saw a huge selloff amid concerns over expensive valuations.
Expectations of improvements in private capital expenditure and optimism about political stability are fuelling gains despite concerns around expensive valuations, said Vinod Nair, head of research at Geojit Financial Services.
“Benign input costs and expectations of a pickup in rural demand will aid corporate earnings growth. On the global front, the Fed will unveil its latest minutes this week, which may hint at the direction of rates. However, the higher US 10-year yield and domestic outflows of overseas funds are pointing to caution,” he added.
On a year-to-date basis, foreign portfolio investors are net sellers to the tune of $3.6 billion. Encouraging corporate earnings growth and continued inflows from domestic investors have offset the selling pressure from overseas funds.
Analysts said that although the long-term outlook is positive, they expect some pullback in the near term.
“Overall, we expect the market to continue its upward momentum while taking support from global cues. The Fed meeting minutes that would be released during the week would hold importance after the US reported above-expectation Consumer Price Index and Producer Price Index data, which dampened sentiment,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
The market breadth was favourable, with 2,362 stocks advancing and 1,604 declining.
ICICI Bank, which rose 2.03 per cent, was the biggest contributor to Sensex gains.
Reliance Industries, which rose 0.8 per cent, Bharti Airtel, which rose 2 per cent, and ITC, which rose 1.1 per cent, were the other big contributors. Except for three, all sectoral indices on the BSE gained.
Consumer durables stocks gained the most, with its sectoral index adding 1.76 per cent. Shares of ITC, which fell nearly 14 per cent over the past four weeks, rose 1.2 per cent, leading the gains in the consumer index.
