Sensex hits record high, Nifty ends above 16,100 for first time; financials, FMCG stocks lead

Indian benchmark equity indices surged to record closing peaks on Tuesday with Nifty settling above the 16,000-mark for the first time. Sensex rallied 872.73 points or 1.65% to close at its lifetime high of 53,823.36. The broader NSE Nifty jumped 245.60 points or 1.55% to record 16,130.75.

The one-way rally in today’s trade has made investors richer by Rs 2.27 lakh crore as the market capitalisation of the BSE listed firms touched a record high of Rs 240.02 lakh crore.

“Nifty today finally managed to break its two-month-long consolidation to touch the most awaited level of 16k. It had shown strong resilience since the start of June and moved in a very narrow range despite weak global cues and finally managed to leap forward towards the 16000 zone. What really provided support to the market was the 1QFY22 earnings report which begun on a very healthy note despite the Covid 2.0 impact,” said Sneha Poddar, AVP – Research, Broking & Distribution, Motilal Oswal Financial Services.

Management commentaries across the board suggest an improved demand environment post June’21, led by the easing of restrictions, lower active COVID-19 cases, and a pickup in vaccinations. We estimate corporate earnings to continue to recover, as the underlying economy opens up, with progressively higher vaccination trends, thus offering many bottom-up opportunities, Poddar added.

Sectoral strand

Most sectoral indices on the NSE barring Nifty Metal and Nifty Realty closed in the green. Nifty FMCG closing nearly 2% higher was the top sectoral gainer followed by Nifty Financial Services, Nifty Auto and Nifty Bank. Nifty Media lost nearly 1%, while Nifty Metal fell marginally by 0.05%.

The fear gauge or India VIX spiked 7.36% to 13.74 levels.

Broader market

The broader market however underperformed benchmark indices by a large margin. As BSE MidCap index settled at 23,374 gaining up 0.19% after hitting a fresh high of 23,442. Whereas BSE SmallCap index ended at 27,134 up by 0.23% after making a fresh high of 27,232 earlier in the day.

The market breadth was in favor of bulls as 1,740 stocks advanced compared to 1,503 declined and 133 remained unchanged.

Economy

India’s merchandise exports grew 47.19% to $35.17 billion in July on account of a healthy growth in the shipment of petroleum, engineering goods and gems and jewellery, according to provisional data of the commerce ministry. Imports during the month also rose 59.38% to $46.40 billion, leaving a trade deficit of $11.23 billion.

Global markets

European markets rallied across the board on Tuesday despite rising Covid-19 cases, Chinese tech regulation and US growth worries.

Asian stocks mostly edged lower as the Delta coronavirus variant spread in key markets in the region and put Chinese authorities on high alert, rattling investor confidence.