Rallying for the fourth successive session, equity benchmark indices closed at record highs on Thursday, in line with positive global equities. After a volatile session, Sensex ended 358 points higher at 50,614 and Nifty gained 105 points to 14,895. Sensex and Nifty hit fresh lifetime highs of 50,678 and 14,913 during today's session.
Yesterday, Sensex ended 458 points higher at 50,225 and Nifty gained 142 points to 14,789. On Wednesday, Sensex and Nifty hit record highs of 50,526 and 14,868.
On the domestic currency market, the Indian rupee ended unchanged at 72.96 per US dollar on Thursday even as the domestic equity markets scaled fresh highs. Traders said investors turned cautious ahead of Reserve Bank of India's monetary policy decision on Friday.
1. Budget rally
Buying triggered by budget 2021 continued for the fourth straight session as the domestic market cap crossed Rs 200 trillion market capitalisation mark during the day.
Traders said market barometers have kept hitting new highs in the last four consecutive rallies, factoring all the positive announcements made in the growth-oriented budget delivered by Finance Minister Nirmala Sitharaman.
Strong buying was witnessed in index heavyweights from banks, PSBs, and FMCG space that supported the market rally. ITC, M&M, ONGC, Bajaj Finserv, NTPC were among the top gainers while ICICI Bank, IndusInd Bank, Infosys, HDFC traded as top losers.
Further, positive quarterly earnings also helped the rally.
2. Positive global cues
Asian markets ended slightly lower as investors looked to take profits after the recent runup. Bourses in Tokyo, Hong Kong, Seoul and Shanghai closed with losses. US markets saw profit booking from recent highs even as Amazon and Google reported healthy quarterly earnings. Amazon and Alphabet came out with strong earnings numbers.
Stock exchanges in Europe were largely trading with gains in mid-session deals. European indices extended rally for the fourth straight day as investors were hopeful of a swifter global economic recovery amid positivity in terms of better quarterly earnings. Energy shares also helped markets.
World stock markets were enthused as oil prices approached $60 a barrel after OPEC and its allies extended production cuts
Oil markets continued to advance after the OPEC plus alliance of major producers stuck to a reduced output policy and U.S. crude stockpiles fell to their lowest since March last year. U.S. crude rose 0.79% to $56.13 per barrel and Brent gained 0.74% to $58.89
3. US stimulus
President Joe Biden encouraged democratic lawmakers to act fast on his $1.9 trillion COVID rescue plan and was more concerned that too little would be provided rather than too much when it came to economic relief.
The House passed a budget resolution Wednesday, a key step as Democrats push toward a vote on a $1.9 trillion coronavirus relief package.
4. Foreign fund inflows
Foreign institutional investors (FIIs) welcomed FM's Budget speech and bought shares for the third session straight worth Rs 10,196.71 crore in the Indian equity market since February 1. Yesterday, Foreign portfolio investors (FPIs) bought shares worth Rs 2,520.92 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 399.74 crore in the Indian equity market, provisional data showed.
Earlier, FIIs had sold shares worth Rs 12,731 crore in the domestic market between 22-31 January, amid pre-budget volatility faced last week.
5. Technical outlook
After Sensex's climb to 50k, all eyes are awaiting Nifty to the next psychological level of 15,000 mark in the upcoming sessions, that has already achieved the upside target of 14,890 by closing bell today.
With stock markets having scaled a fresh peak, BSE's market capitalisation rose to Rs 200.11 lakh crore against the previous close of Rs 198.43 lakh crore.
Vinod Nair, Head of Research at Geojit Financial Services said, "The market turned positive from its weak start and traded near lifetime highs following a recovery in banking stocks. Driven by the hope of privatization & NPA restructuring, PSU banks were at the forefront. FMCG, Media and Metal were also in focus with the broad-based rally. We cannot expect more from the on-going Monetary Policy Committee meeting, considering the encouraging economic outlook than to maintain a status quo and accommodative stance. While they will work on measures to normalize the gap between the repo rate and market yield"
Ashis Biswas, Head of Technical Research at CapitalVia Global Research said,"The market witnessed to extend the gain further to yesterday's rally in the last hour of the session. The market is likely to hold the momentum and likely to reach the level of 14950-15000. The level 14730-14750 to act as a support zone from the short-term perspective. The momentum indicators like RSI, MACD to stay positive. Buy on dips will be a good opportunity in the market.
Ajit Mishra, VP - Research, Religare Broking said," The outcome of the MPC's monetary policy review meeting, which is scheduled for Feb 5, will be closely watched by the participants. The majority expect status quo on interest rates but the commentary on inflation and economic outlook would hold importance. Amid all, we reiterate our view to focus on the selection of stocks and continuing with the "buy on dips" approach. Nifty has the potential to test 15,200 zone ahead."