Market wrap: Sensex ends above 59,000, up 929 points; Nifty tops 17,600

Top headlines

· Sensex ends above 59,000, up 929 points; Nifty tops 17,600
· Eicher Motors surges over 5% on Royal Enfield’s strong December sales
· TCS gains 4% in three days, hits 13-week high
· Textile shares rally on improved outlook
· Nifty due for a pause, may even ease in early 2022, says UBS
· India's Manufacturing PMI at three-month low in December

Indian equities kicked off calendar year 2022 on a solid note as fresh record highs in global markets bolstered domestic investors' confidence. The S&P BSE Sensex, which opened quietly, later gained strength during the day to hit a high of 59,266. The index then settled 929 points higher at 59,183 levels.

The NSE Nifty50, meanwhile, ended the day at 17,626, up 272 points after touching an intra-day high of 17,647. The top gainers on the index included Coal India, the Bajaj twins, Tata Steel, ICICI Bank, IndusInd Bank, and HDFC Bank. The laggards were largely from the pharma space, including Cipla, Dr Reddy's Labs, and Divis Labs. Nestle India, HUL and M&M were some of the other top losers.

After a stellar two-year run for the Nifty during which it even left the S&P 500 behind at times, analysts at global investment firm UBS believe that the index's current valuation does not fully reflect upcoming headwinds. In a report, it said these headwinds include rising interest rates, both globally and in India, and importantly, the return of India's current account deficits. Given these factors, a multi-month pause for the index may be in order, according to the report.

This apart, among sectors, all indices today clocked smart gains, barring the Nifty Pharma index, which ended 0.5 per cent lower.

Banks, Financials, Auto, and IT shares led the benchmark indices to their respective fresh highs of the day. The Nifty Bank and Private Bank indices were the top performers, rising 2.7 per cent each, followed by the Nifty Financial Services, which was 2.5% up.

The Nifty IT index closed 1% higher today after hitting a record high of 39,286. Individually, the shares of IT major TCS hit a 13-week high of Rs 3,829, up 2.5 per cent, in intra-day trade. The stock has gained 4 per cent in the past three days on the BSE, and hit its highest level since October 8, 2021. The company's December quarter results are scheduled to be declared on January 12.

Auto shares also remained in demand on the back of healthy sales data for the month of December. Auto majors Tube Investments, Tata Motors, Ashok Leyland, Bharat Forge and Maruti were among the top gainers on the Nifty, all of which ended between 1 and 7% higher.

Eicher Motors rallied 5.5 per cent on the BSE, for instance, after the company’s Royal Enfield brand reported a 43 per cent rise in month-on-month sales at 73,739 units in December. The company reported its best reading in several months. On a year-on-year basis, the Royal Enfield sales grew 7 per cent.

Besides, the shares of textile companies also maintained their upward movement on improved outlook. Shares of Vardhman Textiles and Sangam India hit their respective record highs, while Cantabil Retail touched a 52-week high on the BSE.

Lastly, on the macroeconomic front, India’s manufacturing activity lost some momentum in December, easing to a three-month low of 55.5, after hitting a 10-month high in November, amid fears that the rapidly spreading cases of Covid-19 may hit consumer sentiment and output.