Indian equities continued to gain for the second day on Thursday. Both Sensex and Nifty ended at record closing high levels led by banking and FMCG stocks while IT and metals indices closed in red.At the close, the benchmark 30-share index, BSE Sensex gained 417.96 points or 0.71% at 59,141.16 with 19 components posting rise. Meanwhile, the broad based NSE Nifty climbed by 110.05 points or 0.63% at 17,629.50 with 32 components posting rise.
Major gainers in the 30-share index were IndusInd Bank (7.34%), ITC (6.83%), State Bank of India (4.46%), Reliance Industries (2.07%), Kotak Mahindra Bank (1.87%), ICICI Bank (1.80%), Axis Bank (1.40%) and Bajaj Auto (0.86%).
On the other hand, TCS (1.32%), Tata Steel (1.25%), Tech Mahindra (1.16%), Bharti Airtel (1.02%), HCL Technologies (0.88%), UltraTech Cement (0.53%), Infosys (0.51%) and Bajaj Finserv (0.49%) were the biggest losers in the Sensex.
Market breadth was positive with 1,678 advances against 1,591 declines.
Despite weak global cues, introduction of PLI reforms for telecom and Auto sectors led to the rally, giving confidence to the investors about the reform led economic recovery. Though the rally was broad based, PSU Banks showed stellar performance - up over 5% ahead of Finance Minister’s press briefing on Bad Bank. In fact, Bank Nifty hits record high today, breaching its previous high of Feb’21.
Global cues continue to be weak as investors remain cautious due to worries over global economic recovery, weak Chinese data and focus on key U.S. data (retail sales and weekly jobless claims) due later in the session.
Commenting on the market outlook, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said, "The market might be volatile on account of fragile global cues, on worry over slower economic growth and rising Delta variant cases globally. Investors are cautious ahead of next week’s Federal Reserve meeting, awaiting indications on when the central bank will start withdrawing its monetary stimulus and start raising interest rates eventually.
Valuations too are rich and hence could lead to bouts of profit booking. But the overall sentiment in the domestic market remains optimistic, given continuous improvement of macro data points and positive earnings expectation. Controlled Covid cases domestically and strong pick up in vaccination drive, has led to healthy pick-up in economic activities. Further the PLI schemes announced by the government so far shows their strong intent to address the sectors’ challenges and pave way for development of local capabilities and capacities, thus enabling companies to rightly capture the opportunity thrown open by China+1 strategy."
