Sensex journey from Stocks continue record-breaking sprint with Sensex crossing 71000, Nifty settling at 21456.6560,000 to 70,000: An analysis

Stocks continued their record-breaking sprint with the Sensex crossing 71000 and the Nifty settling at a lifetime high of 21456.65 as investor sentiment remained buoyant after the dovish comments from the Fed and expectations of a pickup in global economic growth from the New Year.

Rallying for the third consecutive session, the 30-share Sensex vaulted 969.55 points or 1.37 per cent to close at 71483.75.

During the day, the benchmark jumped 1091.56 points or 1.54 per cent to reach a record intra-day peak of 71605.76. In three days, the BSE benchmark has risen 1932.72 points or 2.77 per cent.

The NSE Nifty climbed 273.95 points or 1.29 per cent to finish at 21456.65. This came after the 50-share index hit an intra-day peak of 21492.30 as it gained 309.6 points.

The three days of rally have seen the market capitalisation on the BSE increase by Rs 8.11 lakh crore. It has now touched a fresh record high of Rs 357.87 lakh crore.

While the record run began with the poll results in three States nearly a fortnight back, it received another impetus as the Fed signalled three cuts next year.

Soft crude oil prices and increased participation from foreign portfolio investors (FPIs) have also supported the bullishness.

Provisional data from the NSE showed overseas investors making net purchases of over Rs 9,200 crore on Friday. So far this month, they have made purchases of Rs 42,733 crore which is the highest in four months.

“There is a lot of enthusiasm amongst the investors, especially foreign investors, who are pumping in funds into domestic equities over the past few weeks post the state election results,” according to Prashanth Tapse, senior VP (Research), at Mehta Equities Ltd.

“Political stability and hopes of continuation of reforms going ahead coupled with US Fed’s dovish stance on rates, falling bond yields and sliding crude oil prices has improved the sentiment,” he said.

He, however, added that given the recent rally, benchmark indices may consolidate in the near term.

IT stocks once again stole the limelight with HCL Technologies seeing the biggest gains as it shot up 5.58 per cent. It was followed by Tata Consultancy Services, Infosys, State Bank of India, Tata Steel, NTPC, Tech Mahindra and Wipro. Nestle, Bharti Airtel, Maruti and ITC were among the laggards.

“While the impact may be short-lived the probability of profit booking is very high as we approach the year-end, it is also likely that the talks of an impending slowdown could get more heard unlike as it was in the recent past,” Joseph Thomas, head of research, Emkay Wealth Management said.