Nifty scales all time high; will the record run continue?

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Indian equity benchmark indices settled a percent higher on Monday led by strong gains in metals, FMCG and financial stocks. Bulls took charge and led the benchmark index Nifty to record its all time high level of 15,606 intraday.

The Nifty index quoted at fresh closing peak of 15,583, up 147 points or 0.95%. In fact, Nifty recorded closing high for the third straight session. The Sensex zoomed 590 points in intra-day session and hit a high of 52,013. It, however, pared minor gains ahead of the announcement of Q4FY21 GDP data and closed at 51,937, up 515 points or 1%. The index is now 580 points away from its record high level of 52,517.

The Nifty Bank rallied 385 points or 1.1% to close at 35,526.70 on May 31.

The mood in the broader market also remained upbeat. The S&P BSE MidCap and SmallCap indices added 0.45% and 0.5%, respectively amid buying in construction material, telecom, energy, and metal stocks.

Sectoral Trends Among sectors, Nifty Metal rallied the most over 2 percent followed by Nifty Private Bank, Nifty FMCG, Nifty Financial Services and Nifty Realty that gained over 1 percent each. Selling was seen in PSU Bank, auto and media sectors.

On the Nifty50, JSW Steel, ICICI Bank, Reliance Industries, Bharti Airtel and Tata Steel were the top gainers, while M&M, Adani Ports & SEZ, HDFC Life, IOC and IndusInd Bank led the losses.

RIL ended up 3% and single-handedly lifted the frontline Nifty50 index to record peak of 15,606 in intra-day session. Reliance Industries was the top contributor for second straight day. RIL up 10% in two sessions ahead of payment for first call of rights issue

Metal stocks rose on Morgan Stanley report of price hike. Key contributors, JSW Steel was up 3%, Tata steel was up 2%

Shares of PNB Housing Finance were also locked in the upper circuit of 20% at Rs 525, also its 52-week high, after the company board approved a capital raise of up to Rs 4,000 crore.

The lowest daily case count of Covid-19 infections in 48 days further improved sentiment in the broader market.  The country reported 152,734 fresh Covid-19 cases in the last 24 hours, the lowest daily count since April 13.

GDP and auto sales Markets will react to the GDP numbers and the auto sales numbers on Tuesday. Indian economy grew -7.3% in the fiscal year 2020-21, the provisional full-year Gross Domestic Product (GDP) data released by the government showed on Monday. This contraction is much better than the forecasts of the Reserve Bank of India (RBI) and the Ministry of Statistics and Programme Implementation (MOSPI), both of which had expected GDP for the full year to contract by 8%.

GDP for the fourth quarter (Q4) ended March 31, 2021 stood at 1.6% .

Additionally, with fiscal deficit data for April 2020-March 2021 also released on May 31, it can now be calculated that fiscal deficit for last year came in at 9.3% of nominal GDP, compared with revised estimates of 9.5%.

Here’s how experts see markets trading on Tuesday

Nifty closed the day sharply higher. This is a classic long green candle and it points out to the fact that bulls are in full control of the market.

Nifty has pierced the previous swing high and this is a major trend continuation pattern. The quality of the breakout is very good and signals higher levels in days to come.

The momentum indicators are showing a positive development. We are not ruling out short term corrective decline in the market as Nifty has is rallying for several days. Any drop to 15450-15500 is a buying level. June could be the best month for Nifty.

Manish Hathiramani, Technical Analyst, Deen Dayal Investments

We have successfully achieved the 15,600 target and the index is all set to approach its next target of 15,900. There could be a pause or bouts of profit booking in the interim but that should be utilized to accumulate long positions for higher targets. As long as the market closes above the 15,300 level, the trend remains bullish and opportunities to buy on corrections should be maximized.

Ajit Mishra, VP – Research, Religare Broking

Markets started the week on a firm note and gained nearly a percent, in continuation to the prevailing trend. Markets will react to the GDP data in early trade on Tuesday i.e. June 1. Besides, participants would keep a close watch on auto sales figures. Meanwhile, the last leg of earnings season is also expected to induce stock-specific volatility. Some states have announced relaxation in restrictions and we expect further easing in the coming weeks. Amid all this, we reiterate our bullish yet cautious stance on markets and suggest aligning the positions according to the prevailing uptrend.