The strong gains of the last two sessions have made investors richer by Rs 10.35 lakh crore as the cumulative market capitalisation of BSE listed firms has jumped to Rs 1,48,89,652.44 crore from Rs 1,38,54,439.41 crore on September 19.
The positive sentiment, built after the cut in the corporate tax rate, remained intact as the benchmark indices clocked strong gains for the second consecutive session on September 23 despite unsupportive global cues.
The Sensex and the Nifty started the expiry week on a strong note buoyed by improved domestic sentiments after the government announced yet another set of measures last week.
After a gap up opening, Sensex remained in the positive terrain throughout the session, eventually closing the day with a robust gain of 1,075 points or 2.83 percent, with 16 stocks in the green and 14 in the red.
The Nifty index jumped 326 points or 2.89 percent to settle at 11,600.20. Among the 50 stocks in the index, 32 logged gains.
Both key indices, Sensex and Nifty have jumped over 8 percent in the last two sessions.
The strong gains of the last two sessions have made investors richer by Rs 10.35 lakh crore as the cumulative market capitalisation of BSE listed firms has jumped to Rs 1,48,89,652.44 crore from Rs 1,38,54,439.41 crore on September 19. On September 23 alone, investors' wealth increased by Rs 3.52 lakh crore.
Among the broader indices, BSE Midcap outperformed the benchmark, surging 3.08 percent while BSE Smallcap closed the day with a gain of 2.73 percent, slightly behind the Sensex.
The breadth of the market strongly favoured the gainers. As many as 1,638 stocks logged gains on BSE against 972 that declined.
While most sectoral indices logged strong gains, BSE IT and Teck fell 3.29 percent and 3.12 percent, respectively, as most brokerages downgraded the sector as they believe that there is no material near-term benefit from the tax rate cut.
BSE Telecom (down 1.13 percent), Utilities (down 0.70 percent), Healthcare (down 0.37 percent) and Power (down 0.32 percent) also ended in negative.
On the other hand, BSE Capital Goods emerged as the top gainer among the sectoral indices, jumping 6.55 percent, followed by Bankex and Industrials that settled 5.68 percent and 5.14 percent up, respectively.
Bajaj Finance, Larsen & Toubro, Asian Paints, ITC and Axis Bank were the top gainers in the Sensex index, while Infosys, Tata Motors, Power Grid, NTPC and Tech Mahindra finished as the top losers in the index.
While the market is logging stellar gains, analysts say, there is a latent risk of consolidation.
"The Indian market is trading near peak valuations so we would remain cautious on the markets and expect it to consolidate in the near term. However, the recent announcements made by the FM are definitely positive for the Indian economy from a long-term perspective. Hence, investors should focus on accumulating fundamentally sound stocks," said Ajit Mishra, Vice President - Research at Religare Broking.
Top news of the day:
Army Chief General Bipin Rawat on September 23 said that Pakistan has reactivated Balakot recently. About 500 infiltrators were waiting to infiltrate into India, he added.
Union Home Minister Amit Shah on September 23 mooted the idea of a multipurpose identity card for citizens with all utilities like Aadhaar, passport, driving licence and bank accounts, PTI reported.
The recent measures by the government have made most foreign brokerages rethink their strategies on India. Foreign brokerages see Nifty, Sensex touch all-time highs by 2020 after the corporate tax cut.
The Aam Aadmi Party (AAP) and Prakash Ambedkar-led Vanchit Bahujan Aghadi (VBA) are exploring options to enter into an alliance for the Maharashtra Assembly polls. The state heads for voting on October 21.
Stocks in news:
Extending their losing streak into the sixth consecutive session, shares of Zee Entertainment Enterprises closed at Rs 272.10, down 9.63 percent on BSE on September 23, following reports that a lender had sold a part of the company’s pledged shares in the open market. In the last six sessions of losses, the stock has retreated by over 22 percent.
Shares of Bharat Petroleum Corporation (BPCL) jumped 12.55 percent to Rs 454.30 while those of Container Corporation of India (CONCOR) rose 6.44 percent to settle at Rs 584.60 following reports that the government wanted to complete public sector units (PSUs) stake sale in the financial year 2019-20.
Axis Bank shares gained 6.81 percent to end at Rs 727.05 after it raised Rs 12,500 crore in qualified institutional placement from foreign and local investors.
Shares of HDFC Bank extended their winning spree into the third consecutive session, closing the day at Rs 1,258.45, up 4.86 percent. In the three sessions of gains, the stock has jumped 15 percent. HDFC Bank had an effective tax rate of 33.4 percent in the quarter ended March and experts say it will reap hefty benefit from the cut in the corporate tax rate.
Shares of Escorts closed with a strong gain of 11.74 percent at Rs 634.60 even as BlackRock Inc is reducing its stake in the company. As per a regulatory filing, BlackRock Inc brought down its shareholding in Escorts to 2.84 per cent from 3.20 percent by selling shares on September 19. The firm sold 4.41 lakh shares worth around Rs 700 crore through a market transaction.
Global updates:
Most Asian share markets slipped on September 23 as market sentiment was fragile with civil unrest in Hong Kong, tensions in the Middle East and worries that a trade deal between the United States and China could take a long time to materialise, reported Reuters.
Shanghai Composite Index closed 0.98 percent down at 2,977.08, while Kospi ended flat at 2,091.70. Japanese markets were shut for a public holiday.
Technical view on the market:
Nifty opened near the 61.8 percent retracement mark at 11,543 and managed to hold above the key Fibonacci level on closing basis. This indicates that the bulls continue to have an upper hand on the index.
Analysts, however, say that a near term consolidation, however, cannot be ruled out before the index stretches higher.
"The range for the plausible consolidation will be 11,500-11,700. The short term target on the higher side continues to be at 11,790 with potential to stretch higher. On the flip side, the gap area of 11,471-11,381 will now act as a key support zone for any minor degree dip. The gap area can be considered as a fresh buying opportunity should the Nifty attempt to test the same," said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
