The NSE Nifty rose 428.75 points, or 1.76%, to close at a record of 24,834.85. The index hit a lifetime high of 24,861.15 during the day. The BSE Sensex rose 1,293 points, or 1.62%, to end at 81,333 after hitting a high of 81,427.18. The index fell 10 points short of the all-time closing level of 81,343.
“With key events behind, redeployment by investors and traders on sidelines is aiding markets to scale to newer highs,” said Sriram Velayudhan, senior vice president, IIFL Securities. “While the momentum oscillators remain extremely overbought, in the short term, if Nifty crosses 24,900, it could go up to 25,200 levels.” Among top gainers on the indices, Bharti Airtel rose 4.5%, Adani Ports advanced 3.6%, Tata Steel gained 3.3% and JSW Steel moved up almost 3%.
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In the near term, the Nifty will face resistance at 25,100, said Vaishali Parekh, vice president, technical research, Prabhudas Lilladher. “With strong participation across all sectors, the market is likely set to reach 25,200, gearing up for yet another new high,” said Parekh.
On Friday, foreign portfolio investors bought shares worth a net ₹2,546.38 crore. Domestic institutions were buyers to the tune of ₹2,774.31 crore.The Sensex and Nifty fell 0.6% and 0.4%, respectively, in the previous three days.Sentiment had soured after the government proposed to raise short-term and long-term capital gains tax on equities in the budget on July 23.“We saw the market move upwards because mutual funds and DIIs (domestic institutional investors), who were on the sidelines before the budget, started buying again, leading to more flows in the market,” said Christy Mathai, fund manager, Quantum AMC. “Sectorally, the outlook for heavyweights like IT has improved this quarter, and we see auto doing well.”
He remains positive on banks despite weak sentiment due to attractive valuations and doesn’t expect the tight deposit environment to persist in the long term. Mathai also remains bullish on IT and insurance.
On Friday, the Nifty Midcap 150 gained 1.72% and the Nifty Small-cap 250 rose 0.94%. Out of the 4,040 stocks traded on the BSE, 2,595 advanced and 1,354 declined.
The market rebound resulted in the Volatility Index or VIX — a fear measure — dropping 2.93% on Friday to 12.25, indicating some comfort among traders in the market.
Velayudhan said June quarter results have been disappointing so far, a sore point for the market
“The Q1 results have largely remained subdued except for a few IT and consumption names, rest have not met expectations,” he said. “This brings to the fore the possibility of deceleration in earnings momentum going forward.”
Velayudhan remains optimistic about pharmaceuticals, FMCG, IT and auto stocks.
Elsewhere in Asia, China advanced 0.14%, Hong Kong rose 0.1%, South Korea gained 0.78%, Taiwan dropped 3.29%.
The pan-Europe index Stoxx 600 climbed 0.83%.