Indian stocks hit fresh record highs on Thursday, fuelled by auto and metal stocks on the expiry of monthly derivatives contracts. The BSE Sensex index rose 666.25 points, or 0.78 percent, to close at a record high of 85,836.12, while the Nifty 50 index rose 211.90 points, or 0.81 percent, to close at 26,216.05.
Maruti Suzuki was the top gainer among Sensex stocks, up 4.76 per cent to close at 13,384.30. Other major gainers included Tata Motors (up 3.08 per cent to 993.20), Mahindra & Mahindra (up 2.97 per cent to 3,180.85), Bajaj Finserv (up 2.91 per cent to 1,982.35) and Tata Steel (up 2.48 per cent to 165.60). NTPC (down 0.44 per cent to 434.40) and Larsen & Toubro (down 0.90 per cent to 3,761.70) were the only two Sensex stocks to fall.
The market rally was fuelled by positive global news, including stimulus measures announced by China and hopes of interest rate cuts in the U.S. Most sectors saw buying interest, with auto and metal stocks leading the gains.
On the Nifty, Maruti Suzuki was the top gainer, rising 4.48 per cent, followed by Grasim Industries (3.19 per cent), Tata Motors (2.83 per cent), Shriram Finance (2.78 per cent) and Bajaj Finserv (2.59 per cent), while Cipla (-1.47 per cent), ONGC (-1.24 per cent), Larsen & Toubro (-0.89 per cent), Hero MotoCorp (-0.80 per cent) and NTPC (-0.60 per cent) were among the top losers.
Commenting on the market trends, Shrikant Chauhan, Head of Equity Research, Kotak Securities said, “Benchmark indices continued to maintain positive momentum today. Technically, after a weak opening, the market breached the 26000/85300 levels, picking up positive momentum post the breakout. We are seeing bullish candlesticks on the daily chart and breakout continuation formation on the intraday chart, indicating further upside potential from the current levels.”
Market breadth was marginally negative with 2,293 stocks declining and 1,686 stocks advancing on the BSE. A total of 257 stocks hit their 52-week highs and 46 stocks hit their 52-week lows. Seven stocks hit their upper limits and two stocks hit their lower limits.
Sectoral performance was broadly positive with the Nifty Auto index up over 2 per cent. The Nifty Metals index also rose over 2 per cent and consumer durables stocks witnessed profit booking at higher levels.
Commenting on the market trends, Ajit Mishra, Senior Vice President, Research, Religare Broking Ltd said, “Positive global signals and rotational buying across sectors have been driving the indices higher on a weekly basis. Current indicators suggest that this upward trend will continue and Nifty may approach the 26,500 level. While all sectors are participating in the move, we continue to favour interest rate sensitive sectors such as banking, auto, real estate and financials along with select stocks from the metals and energy sectors.”
The India VIX, a volatility index, fell 7.12 percent to settle at 11.84, indicating a decline in market volatility.
Prashant Tapus, senior vice president (research) at Mehta Equities, attributed the market surge to multiple factors. “Investors unwinding positions on monthly maturities and buoyant market indices in Asia and Europe triggered the surge. Falling bond yields in the US and other developed economies, coupled with China’s stimulus package announcement, have sparked fresh optimism in global equity markets, including India.”
Technical analysts pointed out positive chart patterns and the potential for further upside. Hrishikesh Yedve, vice president, technical and derivatives research, Asit C. Mehta Investment Interrmediates Ltd, pointed out: “Technically, the index made a fresh breakout in the ascending channel pattern near 26,000 and managed to sustain above the 26,200 threshold. One should adopt a ‘buy low’ strategy for Nifty as long as it sustains above the breakout level of 26,000.”
The banking sector also performed well with the Bank Nifty Index up 273.70 points or 0.51 percent to close at 54,375.35. Other major indexes also fared well with the Nifty Next 50 closing 0.74 percent higher at 77,086.95 while the Nifty Midcap Select Index was little changed at 13,258.60. The Nifty Financial Services Index rose 0.67 percent to close at 25,155.45.
Vikram Kasat, Head of Advisory, PL Capital, Prabhudas Lilladher highlighted the upcoming market factors saying, “The next big catalysts for the market will be the festive season which will stimulate consumer spending, Q2FY25 earnings and whether the Reserve Bank of India’s Monetary Policy Committee decides to cut interest rates following the 50bps rate cut by the Federal Reserve.”
Deepak Jasani, head of retail research at HDFC Securities, gave further background: “Markets in Asia and Europe rose on news that technology stocks rose and China announced further economic stimulus. Beijing announced further measures to revive the world’s second-largest economy, including cash transfers to the poor and a $140 billion injection into the largest state-owned banks.”
Looking ahead, Nagaraj Shetty, Senior Technical Research Analyst, HDFC Securities, hinted at potential upside targets as follows: “Nifty, which reached the upside target of 26,250 levels (1.618% Fib extension) on Thursday, can rise to 26,900 levels (1.786% Fib extension) which could see further gains in the coming weeks. Immediate support is at 26,000.”
On September 25, 2024, in the Indian market, FIIs/FPIs recorded a net sale of Rs 9,739.4 crore while DIIs recorded a net purchase of Rs 1,778.99 crore. Clients recorded a net sale of Rs 1,297.62 crore while NRIs recorded a net sale of Rs 8.06 crore. Proprietary traders recorded a net purchase of Rs 2,555.0 crore.
Indian equity markets have continued to trend higher and investors and analysts remain optimistic about the near-term outlook, buoyed by positive global economic signals and sectoral strength. However, market participants will be closely monitoring upcoming economic data and corporate earnings to gauge the direction of the market.
