Indices rally on global cues; Sensex, Nifty make healthy gains
Mumbai, Sep 23 : Positive global cues emanating from the US lifted India's key stock indices to record high levels during Thursday's trading session.
Accordingly, both the key indices - S&P BSE Sensex and NSE Nifty50 - touched their new record intra-day highs after the US Federal Reserve kept interest rates unchanged.
Intra-day, Sensex reached a new high of 59,957.25 points, while Nifty50 touched a high of 17,843.90 points.
Globally, Asian shares made gains supported by positive news from the cash-strapped developer, Evergrande Group.
Similarly, European stocks rallied for a third day as global sentiments improved.
Initially, the Indian equity benchmark indices made gap-up openings with volumes in the markets being above average. Sector wise, all indices witnessed buying, led by realty, PSU and metal stocks.
Consequently, the S&P BSE Sensex closed at 59,885.36 points, higher by 958.03 points or 1.63 per cent from its previous close.
Similarly, the NSE Nifty50 edged higher. It rose to 17,822.95 points, higher by 276.30 points or 1.57 per cent from its previous close.
"Nifty closed at another record high after a great day when it just kept rising hour by hour without any major corrections. Nifty is marching towards the 18,000-mark slowly and steadily, unless some global event (like Evergrande) upsets this momentum," said Deepak Jasani, Head of Retail Research, HDFC Securities.
"Evergrande is due to pay $83.5 million worth of interest on a dollar-denominated bond on Thursday. It's not clear yet whether the company will make that payment, and it had not commented by the close of trading in Hong Kong. Anything negative on this front could impact global sentiments," Jasani added.
According to Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services: "Realty stocks witnessed gains of 25 per cent over the last three sessions on the back of strong demand in affordable housing along with rate cuts announced by several lenders ahead of the festive season.
"Other sectors like banking, financial services, metal, oil and gas, auto, capital goods, bank, and energy also witnessed uptick in the range of 1-2.5 per cent."
Khemka also said that domestic sentiments are buoyant as demand is coming back to normalcy faster than expected.
"Financials are seeing decent pick up in disbursements and improvement in collection efficiencies month-on-month. Commentaries are quite upbeat across almost all the sectors, barring auto. Rising commodity costs and supply crunch in several segments have created some near-term margin headwinds for several sectors," said Khemka.
"However, strong cash-flows of FY21 and 1HFY22 are facilitating corporates to de-leverage and clean up their balance sheets. But all said, liquidity, benign sentiments, falling Covid cases, upbeat corporate commentaries and low cost of capital have lifted the valuation multiples to stratospheric levels, especially for a lot of the desired high-quality names across sectors," he added.
S. Ranganathan, Head of Research at LKP Securities, said: "Buoyed by positive tailwinds like the progress of the monsoon and the pace of vaccination, the bulls upped the ante today in style as the Sensex inched closer towards the 60K-mark.
"The slew of reforms undertaken during the pandemic has now begun yielding results and most of the sectoral indices barring the media index were up in trade today. Mortgage and real estate names were seen buzzing around on incremental positive newsflow."