Stock indices climb new peaks
Sensex surges 873 points to a new high, while the Nifty closed above 16,000-mark
MUMBAI: The Sensex skyrocketed 873 points to a fresh closing peak while the Nifty finished above the 16,000-mark for the first time on Tuesday as economic recovery hopes triggered across-the-board buying. Investors grew richer by ₹2.30 lakh crore, with market capitalisation of all BSE-listed reaching a lifetime high of ₹2,40,04,664.28 crore.
Rising for the second straight session, the 30-share BSE benchmark Sensex ended 872.73 points or 1.65% higher at its fresh closing record of 53,823.36. Similarly, the broader NSE Nifty rallied 245.60 points or 1.55% to an alltime peak of 16,130.75.
The run-up in stocks comes before the central bank’s monetary policy decision Friday, where interest rates are expected to be left at an alltime low even as inflation accelerates. The upswing factors in expectations of future growth as central banks around the world take steps to protect their economies finance minister Nirmala Sitharaman told parliament on Tuesday.
India has seen a surge in first-time investors, willing to buy riskier assets as returns from bank deposits and traditional savings avenues dip. The number of retail investor account surged nearly 35% in the financial year ended March to reach 55 million, according to the Securities and Exchange Board of India, a trend similar to what is being seen in developed markets like the US.
Domestic institutional investors (DIIs) such as mutual funds and insurance firms bought about $2.5 billion of Indian stocks in July, according to data compiled by Bloomberg. That offset a net sale of $1.7 billion by foreign funds, the biggest outflow since March 2020 when the nation went into one of the strictest lockdowns to curb the spread of the virus.
Titan was the top gainer in the Sensex pack, spurting 3.89%, followed by HDFC, Nestle India, IndusInd Bank, UltraTech Cement, Bharti Airtel and State Bank of India. Only three index components finished in the red —Bajaj Auto,
Tata Steel, and NTPC, shedding up to 0.33%. “Bulls pulled off the 16,000 mark on the Nifty effortlessly buoyed by positive news flow on goods and services tax (GST) and export data as domestic fund houses poured ₹28,000 crore during the first four months of the current fiscal,” said S Ranganathan, head of research at LKP Securities.
The country’s exports grew 47.19% to the “highest ever monthly figure” of $35.17 billion in July on account of healthy growth in petroleum, engineering, and gems and jewellery segments, as per official data released post market hours on Monday. The journey past 16,000 quite clearly has been led by the retail investors who have allocated more into equities even as FIIs sold worth ₹9,500 crore during this period, he noted.
“The present rally is all the more significant since it provides enough opportunities to the new investor coming in now as several pockets of the economy still offer value going forward,” he added.
Binod Modi, head-strategy at Reliance Securities, said key economic indicators like GST collection, auto sales volume and other high frequency indicators like e-way bills indicate a strong rebound in July, which indicates sustained healthy corporate earnings in subsequent quarters.
“Barring financials, June quarter earnings so far have been encouraging and most companies succeeded to beat consensus estimates, which offered comfort and aided to restrict sharp fall despite selling pressure in global equities,” he added.
Sector-wise, BSE telecom, fast-moving consumer goods (FMCG), auto, bankex, finance and teck indices rose up to 1.70%, while metal closed with losses. Broader BSE midcap and smallcap indices advanced up to 0.23%. Asian markets tumbled after China’s regulatory crackdown seemed to be heading towards online gaming giants, while European equities were propped up by strong corporate results. In Asia, bourses in Shanghai, Tokyo and Hong Kong ended with losses, while Seoul was positive.
Stock exchanges in Europe were trading with gains in midsession deals.
Meanwhile, international oil benchmark Brent crude advanced 0.47% to $73.23 per barrel. The rupee rose by 6 paise to close at 74.28 against the US dollar on Tuesday amid a weak American currency overseas. Foreign institutional investors (FIIs) were net sellers in the capital market on Monday as they offloaded shares worth ₹1,539.88 crore, as per exchange data.