NEW DELHI: Buying continued on Dalal Street for the third day on Wednesday as benchmark indices hit fresh record highs in the morning session led by favourable Union Budget, superior earnings and positive global cues.
Foreign institutional investors also came back to the party, lifting the sentiments of the market. They have been a mainstay and a driving force behind the unprecedented rally in the last 10 months.
“”The risk-on is back in the market with massive FII inflows of Rs 6,181 crore yesterday. There is huge delivery based buying in HDFC Twins, Tata Motors, RIL, ICICI Bank and many other bluechips. The growth-oriented bold budget, with emphasis on privatization, has facilitated this return of risk-on sentiment in the market with Nifty spiking 7 per cent in 2 days,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“The fundamental support to the market comes from the surprisingly good results of companies. If the present, steadily declining Covid incidence trends continue, the economy will bounce back sharply, supporting the rally.”
Factors driving markets
Progress on stimulus front: Hopes for US President Joe Biden’ proposed $1.9 trillion Covid-19 aid bill grew as the Senate took steps to allow Democrats to pass Biden’s package without Republican support.
Global cues: The roll-out of vaccines in many countries is gathering pace, earnings season in the United States and Japan has so far been favourable, and oil prices are at their highest in a year, which are all positive signs for the global economy.
How are bluechips doing
After opening in the green, benchmark indices moved higher. At 10.05 am, BSE flagship Sensex was up 295 points or 0.59 per cent to 50,093. NSE benchmark Nifty followed and added 92 points or 0.63 per cent to 14,740.
“14,750-14,760 needs to be crossed for the Nifty to propel further north. Once we get past this, the next level should be 15,000. The index has good support at the 14,200-14,400 range. Keeping a close below this level as a stop loss, traders can aspire long positions above 14,750,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, IndusInd Bank was the biggest gainer, up 8.65 per cent. Dr Reddy’s Laboratories, Cipla, Power Grid, M&M, Sun Pharma, Tech Mahindra, Divi’s Labs were among other gainers.
Maruri Suzuki was the top loser in the pack, down 1.69 per cent. Kotak Mahindra Bank, SBI, ITC, Shree Cement, JSW Steel, HDFC Bank,
and Tata Steel were other losers in the pack.
Broader market indices traded with gains outperforming their headline peers in the morning trade. Nifty Smallcap was up 0.92 per cent while Nifty Midcap added 1 per cent. Broadest index on NSE, Nifty 500 was up 0.44 per cent.
PI Industries, Ajanta Pharma, BHEL, Aegis Chemicals, Wockhardt and IOL Chemicals were among major gainers from the space while PVR, Alok Industries, Cyient, Future Retail, V-Guard and
were under selling pressure.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.51 per cent. Australian stocks jumped by 1.12 per cent. Shares in China fell 0.06 per cent. Japan’s Nikkei added 0.66 per cent. Shares in Seoul rose by 0.44 per cent. E-mini futures for the S&P 500 rose 0.36 per cent.
Wall Street rallied on Tuesday on renewed hopes for U.S. President Joe Biden’ proposed $1.9 trillion Covid-19 aid bill as the Senate took steps to allow Democrats to pass Biden’s package without Republican support.