Sensex breaches 78K, Nifty scales 23,700 on banking euphoria

Indian headline indices jumped to fresh record highs propelled by bank stocks with the lion's share being accounted for by HDFC Bank. It was strongly supported by ICICI Bank and Axis Bank, who were among the other major index contributors.

The 30-stock S&P BSE Sensex scaled a new peak of 78,016.04, gaining 675 points or 0.87% while the broader Nifty achieved a lifetime high of 23,710.45 gaining 173 points or 0.73%.

Banking gauge Nifty Bank also hit its lifetime high of 52,669.30, taking a 2% or 965 points intraday lead.

The top gainers from the Nifty50 index were Shriram Finance, Axis Bank, HDFC Bank, ICICI Bank and Larsen & Toubro around this time while the top losers from the pack were Bharat Petroleum Corporation Limited (BPCL), Eicher Motors, Tata Steel, Power Grid and ONGC.

Notwithstanding the gains, the market breadth was evenly distributed in favour of gainers and losers. Around 2:40 pm, 24 stocks were trading in the green, 25 in the red while one counter remained unchanged.

Of the 16 sectoral indices on the NSE, 6 were trading in the green. Nifty Financial Services, Nifty IT, Nifty PSU Bank were among the winners. From the losing side, Nifty Auto, Nifty FMCG and Nifty Metal were under the spotlight.

The action was mixed in the broader markets with the Nifty Midcap 100 trading down 0.45% at 55,324.45 while the Nifty Smallcap 100 gained by 0.21% and traded at 18,255.10 around this time.

"The sharp bounce back in Nifty by 7.5% from the June 4 lows indicates that the undercurrent of this market is bullish. High valuations may prompt selling by FIIs and profit booking by DIIs but the exuberant retail investors are likely to buy every dip since the ‘buy- on-dip strategy’ has worked very well in this bull market," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.

He sees the current account turning surplus in Q4FY24 as positive news from the market perspective and expects it to take away the pressure on the rupee and pave the way for FII inflows when clarity emerges on the Fed rate cuts.

"The churn in the market in favour of fairly valued largecaps, particularly in banking, is likely to continue. From a valuation perspective, PSU banks look attractive," Vijayakumar said.

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