Bulls continued to exercise tight control over bears as the market ended at fresh record closing highs for the fourth consecutive session on Thursday. Investors looked for corporate earnings (TCS Q1 numbers due later today and Infosys on Friday morning).
The rally, which was largely dominated by largecaps, was driven by a likely rate cut after lower retail inflation, positive global cues post dovish statement from the Federal Reserve Chair Janet Yellen on further rate hike and overcoming the fears of disruption due to introduction of GST.
The 30-share BSE Sensex surged 232.56 points to 32,037.38 while the 50-share NSE Nifty rose 75.60 points to 9,891.70, which was few points away from 9,000-mark.
With today’s rally, the Nifty shot up more than 20 percent, so far, in the current calendar year.
“We’re now just inches away from the 10000 mark in Nifty and the results of two IT majors (TCS and Infosys) will be decisive,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
He reiterated his buy on dips view on markets and maintaining stock-specific trading approach.
Deepak Jasani, Head – Retail Research at HDFC Securities said valuations look stretched going by historical parameters; but he feels some more upside is possible in the coming few weeks.
The broader markets underperformed benchmarks, with the BSE Midcap and Smallcap indices rising over 0.4 percent despite weak breadth. About 1,425 shares declined against 1,301 advancing shares on the exchange.
Meanwhile, India’s retail inflation cooled down to 1.54 percent in June from 2.18 percent in May while industrial output fell to 1.7 percent in May from 3.1 percent in April.
All sectoral indices closed in green, with the Nifty FMCG leading the charge, up 1.8 percent followed by Private Bank (up 1 percent).
ITC shares gained 3 percent as research houses remained bullish on the stock, expecting it to gain up to 27 percent over a period of one year.
While retaining a buy call with a target price of Rs 417, CLSA said channel checks indicated that ITC has cut cigarette prices for key brands by 1-2 percent in states with high VAT. According to Citi, which also maintained a buy rating with increased target price at Rs 380 (from Rs 355), ITC trades at a discount of around 25-30 percent to the consumer staples sector.
Reliance Industries continued to end at fresh 9-year closing high, up 0.55 percent at Rs 1,518.85.
HPCL rallied 4 percent as investors cheered the prospects for the company post the proposed merger with ONGC. However, they turned cautious on ONGC and IOC as the deal would mean more trouble or pain for these two.
ICICI Bank, L&T, HDFC, Maruti Suzuki, Axis Bank, Bharti Airtel, Sun Pharma and BHEL gained 1-2 percent while Tata Motors was down half a percent on profit booking.
Non-banking finance companies like Ujjivan, Equitas Holdings, AU Small Finance Bank, Bharat Financial Inclusion continued to rally, rising up to 10 percent.
Religare Enterprises, KEC International, HUDCO, CDSL and Eris Lifesciences rallied 5-10 percent whereas Bajaj Hindusthan, Shree Renuka Sugars and Jaypee Infratech fell 2-4 percent.
On the global front, European stock markets were higher as investors digested new earnings reports and looked ahead to more comments from US Federal Reserve Chair Janet Yellen who will testify to Congress for a second day. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.2-0.7 percent at the time of writing this article.Asia ended higher, with the Hong Kong’s Hang Seng and Australia’s ASX 200 up over a percent each.
