Sensex breaches 67000 as indices scale record highs, again

Sensex scaled a record high of 67171.38, before closing at 67097.44, up 0.45%. Nifty also rose to record highs of 19851.70 during the day and closed at 19833.15, with gains of 0.42%.

“Market’s record-breaking spree continued on Dalal Street, as we are in the midst of a strong bull run backed by robust foreign fund inflows, strong growth prospects, even monsoon spread out and stable corporate earnings so far, which have increased the appetite for local stocks,” said Shrikant Chouhan, head of research (retail) at Kotak Securities Ltd.

Banks and financial stocks rose the most, driving the rally, while consumer durable companies, too, were on a roll following a strong performance by Polycab Ltd.

Energy, oil and gas, metals, pharma and healthcare stocks supported the rally. Most other sectoral indices ended higher along with gains in the broader markets. Only the IT sector saw some profit booking and the IT index ended marginally down.

The rally in the domestic markets remained supported by advances in the Asian markets after a strong finish to Wall Street stocks overnight.

“The market continues to be resilient supported by favourable global setup and sustai-ned FII inflows,” VK Vijayakumar, chief investment strategist at Geojit Financial Services, said.

He added that the ongoing global market rally is primarily being driven by the strength of the US economy, which is, so far, showing no signs of recession that markets had feared and discounted in 2022.

Retail sales in US rose less than economists’ expectations. It adds to evidence that domestic consumption remains strong despite pressure from high interest rates and inflation, said analysts.

“That is good news for stock market because it means economy is still growing, but not so rapidly that Federal Reserve has to tamp down runaway inflation by continuing interest-rate hikes,” Devarsh Vakil, deputy head of retail research, HDFC Securities, said.

The recent corporate results from the US too have been better-than-expected, enabling continuation of the rally. The earnings of banks have beaten expectations and a rally in equities linked to companies developing and using artificial intelligence capabilities is driving US markets.

The extra support to Indian markets continues to be provided by sustained foreign fund flows. Foreign portfolio investors have been buyers in 12 out of 13 trading sessions in July as they invested ₹1,165.47 crore in the Indian markets on Wednesday, as per provisional data. In contrast, DIIs booked profit selling ₹2,134.54 crore in the markets and DIIs have been sellers in nine out of the 13 trading sessions.

The benchmark 10-year yield remained flat at 3.8% and is positive for FPI flows. However, the dollar index saw some rise from lows and thus the rupee weakened by 5 paise to 82.08 to a dollar. Analysts are watching dollar index movement going forward.

Meanwhile, earnings season is to pick pace in the coming days and consensus earnings estimates expect Nifty companies to register a 25% year-on-year growth.

This is mainly led by an uptick in the performance of banks, and autos, while the pharma sector is also likely to see a rebound. As the progress will be watched eagerly, the investors will also follow the management commentaries and keep an eye on macroeconomic data for further cues, said analysts.

Ajit Mishra, senior vice-president, technical research, Religare Broking Ltd said the supportive US markets combined with noticeable buying interest across sectors are helping the index inch higher with every passing day.

“We feel the focus should be more on stock selection now citing overbought reading in the index, which may result in consolidation ahead,” said Mishra.

Updated: 19 Jul 2023, 09:33 PM IST