Sensex, Nifty hit fresh record highs amid strong global cues

NEW DELHI: IT and consumer discretionary stocks saw profit booking but thanks to buying in banks and Reliance Industries, benchmark indices scaled another fresh record highs on Wednesday, mimicking the rally in global markets.

Donald Trump’s acceptance of defeat means doubts over governance crisis in the US ebbed whereas development of a number of vaccines have also increased risk appetite.

“With the Dow crossing the 30,000 mark for the first time, there is euphoria in global stock markets. Declining dollar index is pushing FII flows and India is a major recipient of this huge capital flow. But valuations are rich and in many cases approaching bubble territory. If the Sensex goes past 45,000, some profits may be booked and cash levels in portfolios raised. Mid-caps are likely to rise further," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Factors driving markets

• FII flow: Foreign institutional investors have been extremely bullish on Indian markets and bought Rs 53,167 worth of equities in November till now, driving markets higher and higher.

How are bluechips doing
After opening with gains, benchmark indices maintained their lead. At 9.33 am, BSE flagship Sensex was up 218.87 points or 0.49 per cent to 44,741.89. NSE benchmark Nifty followed and gained 61.25 points or 0.47 per cent to 13,116.40.

In the 50-share pack Nifty, ONGC was the biggest gainer, up 4.66 per cent. Tata Motors, SBI, ICICI Bank, HDFC Bank, Grasim Industries, Bajaj Auto and Tata Steel were among other gainers.

Tech Mahindra was the top loser in the pack, down 1.3 per cent. Asian Paints, Hero MotoCorps, HCL Tech, Eicher Motors, Bajaj Finance, M&M, Nestle India and Infosys were other losers.

“We have successfully achieved the Nifty target of between 13,100-13,200 this morning. This zone could prove to be a resistance zone and there is every possibility we witness profit booking. Traders can utilise the current market level to lighten up on their positions and use a trailing stop loss method. The support is now upgraded to 12,800,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

Broader markets
Broader market indices also saw buying but were trailing their headline peers in morning trade. Nifty Smallcap rose 0.41 per cent while Nifty Midcap added 0.17 per cent. Broadest index on NSE, Nifty 500 was up 0.47 per cent.

Indiabulls Housing Finance, Future Retail, Union Bank of India, Sunteck Realty, Kalpataru Power and KEI Electronics were among major gainers from the space while Affle India, Graphite India, Blue Star, Adani Gas, PI Industries and Trent were under selling pressure.

Global markets
MSCI's broadest gauge of world stocks up 0.2 per cent to a record level. Its index of Asia-Pacific shares outside Japan gained 0.45 per cent while Japan's Nikkei rallied 1.7 per cent to a 29-year high.

E-mini futures for the S&P 500 rose another 0.5 per cent in early Wednesday trade.

What to expect

• FOMC minutes: Investors now await the FOMC's minutes from its last meeting due at 1900 GMT for clues on the direction of monetary policy.