Nifty closes above 20K for first time

While Nifty ended the day at the record closing high of 20070, Sensex, with gains of 0.38%, closed at 67466.99 and is inching close to its all-time high of 67619.17 seen in July. The mid- and small-caps, which had seen significant corrections on Tuesday, also ended with gains.

“Domestic equities cheered the robust macro data (strong IIP growth and lower inflation) which helped Nifty close above the 20000-mark for the first time,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services Ltd.

Nifty opened flat, in line with weak global markets, but soon witnessed sharp recovery and ended the day with gains, he added.

Strong buying interest was seen in public sector bank stocks and Nifty PSU Bank index ended with gains of over 4%. Overall, the banking and financial services space saw good investor interest, and stocks in realty, metals, oil and gas, pharma, and telecom were among other prominent gainers. Coal India Ltd, Grasim Industries Ltd, Tata Consumer Products Ltd, Bharti Airtel Ltd and Titan Ltd were key gainers among Nifty stocks.

“Nifty crosses 20000, a move of more than 12-13% of this fiscal year. Unlike earlier moves, this rally is broad based with constant sector rotation,” said Pranav Haridasan, managing director and chief executive officer, Axis Securities Ltd.

Investors are willing to take long-term equity bets here as other key markets are facing strong macroeconomic headwinds, said Shrikant Chouhan, head of research (retail), Kotak Securities Ltd.

He added that surprisingly, buying has continued despite persistent selling by foreign investors and valuations getting stretched in the ongoing market rally.

Foreign portfolio investors (FPIs) were net sellers of assets worth ₹1,631.6 crore in the Indian markets on Wednesday, suggested provisional data, while domestic institutions provided support by being net buyers of assets worth ₹849.86 crore.

However, caution prevails. The contraction in the UK economy and rise in oil prices have created a level of uncertainty in the global market, said Vinod Nair, head of research at Geojit Financial Services. Also, investors are watchful on US inflation data, which holds global significance as it will provide insights into the Fed’s policy outlook, added Nair.

With multiple concerns and looking at sharp gains already registered by markets, experts remain watchful though positive on markets, advising a stock specific approach.

“We reiterate our positive view on markets and suggest continuing with a stock-specific approach, with a focus on index majors and other heavyweights,” said Ajit Mishra, SVP, technical research, Religare Broking Ltd.

Among the sectoral pack, banking, financials and IT hold prominence for further up move so align positions accordingly, he added.

Caution prevails more on mid- and small-caps and even after some correction was seen on Tuesday, analysts said fundamentals do not support the valuations in these segments..

“Among the small- and mid-cap universe, we recommend investors stick to companies with a proven track record of generating wealth for investors through prudent capital allocation and efficient business operations,” said Axis’s Haridas.

The rupee on Wednesday closed 6 paise weaker at 82.98 to a dollar on a day of lacklustre trading. Bids from oil marketing companies amidst rising oil prices are likely to have led to the weakness.

“A fresh weakness is possible if the US CPI data comes higher than expected, while lower than expected data can lead to gains by rupee,” said Jateen Trivedi, VP research analyst at LKP Securities. The rupee was supported in the past few days by lower CPI data in India that came at 6.83% against 7.44% previously, said Trivedi, adding that the rupee trend can be seen as volatile with a higher range between 82.5-83.25.

Updated: 13 Sep 2023, 10:33 PM IST