The party on Dalal Street keeps getting bigger. Equity benchmark Sensex surged over 800 points to touch a record intra-day high of 56,957.79, and the broader NSE Nifty 50 index crossed the 16,900 for the first time on Monday.
The market rally got a boost from the surge in BSE midcap and small-cap indices, which logged their all-time highs in the session.
Markets are at elevated levels right now, but that does not seem to halt the ongoing bull run. The broader NSE Nifty clocked a stellar rally of 45% in the last 12 months, while the BSE Sensex has gained over 19% in the current calendar year and is the best performing index among the leading Asian indices.
Here is all you need to know about the bull run on D-Street!
Technical view
“Nifty once again closed at record levels, and it is inching towards 17,000 levels now. On the lower side, the immediate support is pegged at 16,700 levels and till it’s held, the immediate target is 17,000, and above those levels, it can zoom till 17,200 levels,” Jay Thakkar, VP and head of equity Research at Marwadi Shares and Finance Limited told BusinessToday.In.
“Nifty Bank has also closed well above 36,000 levels which is also quite positive in the short term as that was acting as an immediate resistance and a close above it opens the gates for 36,500 and thereafter 37,200 levels, hence above 36,500 levels a huge move is expected on Nifty Bank,” he noted.
“Nifty Auto has formed a leading diagonal pattern on the daily charts and it has reversed well from the lower end of the pattern taking a good support at its 200DEMA, hence it is likely to inch towards 10,100-10,300 levels in the short term,” he added.
Positive global cues
Wall Street rallied to record highs on Friday after the US Federal Reserve chief Jerome Powell said that the central bank was still far from pulling interest rates off record low.
Following Powell’s speech, the S&P 500 and the Nasdaq closed at record highs for the fourth time this week driven by stocks in technology, communications, consumer discretionary and financials.
At the Fed’s annual Jackson Hole, Wyoming, conference, Powell expressed caution about raising interest rates as the Fed tries to nurse the economy to full employment and would avoid chasing “transitory” inflation. Fed Vice Chair Richard Clarida echoed Powell’s remarks on Friday, saying he believed that the central bank could begin tapering later this year.
Domestic equities look to be good as of now, said Binod Modi head-strategy at Reliance Securities.
“No mention about actual time frame for reversal of $120 billion monthly asset purchase programme by U.S. Fed chief Jerome Powell and indications of no interest rate hike in the medium term essentially show that taper tantrum is still not in the sight in the near term, which augurs well for global equities,” he noted.
U.S. equities were upbeat last week with all three key indices in the U.S. recording weekly gains to the tune of 1-2.8%, Mr Modi added.
FDI equity inflows
Foreign direct investment or FDI into the country rose by more than twofold to USD 17.57 billion during April-June this fiscal on account of measures such as policy reforms and ease of doing business, an official statement said on Saturday.
Total FDI inflow rose to USD 22.53 billion during the first three months of 2021-22 as against USD 11.84 billion in the same period of the last year, it said. Total FDI comprises equity inflows, reinvested earnings and other capital.
Data showed that the automobile industry has emerged as the top sector during the period under review with a 27 per cent share of the total FDI equity inflows. It was followed by computer software and hardware (17 per cent) and services sector (11 per cent).
Rupee strength
The Indian rupee jumped 31 paise to 73.38 against the US dollar in the opening session on Monday. On Friday, the rupee surged 53 paise to close at 73.69 against the US dollar, supported by a firm trend in domestic equities and ahead of the key speech from US Federal Reserve Chair Jerome Powell.
“Indian rupee marked the single biggest day gain after April 16, 2021, on back of month-end rebalancing and foreign fund inflows ahead of the Jackson Hole symposium later tonight,” said Dilip Parmar, Research Analyst, HDFC Securities on Friday.
Pick-up in vaccination drive
On Friday, India achieved the historic milestone of administering over 1 crore Covid-19 vaccines in a single day.
As per the latest Ministry of Health and Family Welfare (MoHFW) data, India inoculated 1,00,64,032 people on Friday, the country’s highest single-day count so far. Due to Friday’s historic achievement, the total Covid-19 vaccination coverage in the country crossed 62 crore (62,09,43,580) doses.
Benchmark indices closed at all-time highs today amid positive global cues. Sensex ended 765 points higher at 56,889.76 and Nifty zoomed 225.8 points to 16,931.05. Bharti Airtel was the top Sensex gainer surging over 4 per cent, followed by Axis Bank, Titan, Tata Steel and Bajaj Finance.
(With inputs from Agencies)