Markets hit fresh highs as telecom, PSU stocks gain
The benchmark indices hit fresh record highs on Wednesday amid a rally in telecom and public sector undertaking (PSU) stocks, with the S&P BSE Sensex notching up its 41st record close of the year.
The Sensex rose 476 points, or 0.8 per cent, to end the session at 58,723. The Nifty rose 139 points and ended the session at 17,519, a gain of 0.8 per cent. Both the indices surpassed their previous records made on September 9.
Shares of Bharti Airtel rallied 4.5 per cent, while index heavyweight Reliance Industries rose 0.5 per cent after the government’s relief package for the telecom sector was seen as beneficial to them.
PSU stocks were among other major gainers with NTPC rallying 7.2 per cent, the most among Sensex components. Coal India rose 4.6 per cent and ONGC gained about 4 per cent.
The Indian markets rose on Wednesday even as most Asian and European markets declined.
“The fact that the breadth of the market has improved sharply over the last few days and that the Nifty has moved up against negative global headwinds is reassuring. This could mean that India as a market could be less impacted by global turmoil going forward,” said Dhiraj Relli, managing director, HDFC Securities.
Data released on Tuesday showed that inflation in the US consumer prices rose 0.3 per cent in August from
July, a fall from the previous month-onmonth rise. Investors cheered this as it reduced the prospects of the US Federal Reserve raising interest rates. The dollar weakened against major peers.
Global investors seem wary of the impact of the delta virus variant and rising costs on economic reopening, as well as China’s crackdown on private industries.
Asian stocks fell amidst weak Chinese economic data in August due to stringent virus controls and news reports that the Evergrande group will not be able to make interest payments. Investors worry that a debt restructuring could lead to further volatility in markets.
“Global cues continued to be weak as slowdown in US consumer inflation failed to overcome concerns about the fast-spreading Delta variant, resulting in slowed economic growth and pandemic-related shortages of labour and supplies continued to drive up prices,” said Siddhartha Khemka, head of retail research, Motilal Oswal.
“The US Fed and the ECB’S decision on stimulus tapering plans are the most awaited decisions and would keep the markets oscillating. Metals and oil prices along with FII flows would also continue to influence the market. Valuations too are rich and hence could lead to bouts of profit booking,” said Khemka.
However, he added, the overall sentiment in the domestic market remains positive, as fewer Covid cases domestically and strong pickup in vaccination drive have led to a healthy uptick in economic activities.
The market breadth was positive on Wednesday, with 2,033 stocks advancing and 1,262 declining. Foreign investors bought shares worth ~233 crore.
The market breadth was positive on Wednesday, with 2,033 stocks advancing and 1,262 declining. Foreign investors bought shares worth ~233 crore