Sensex hits record high, tops 57,000 in early trade; Nifty near 17,000

Domestic benchmark equity indices opened higher and continued their record-breaking spree on August 31, ignoring weakness in Asian peers. However, the upside could be limited as macroeconomic data gross domestic product (GDP) growth data for the April-June quarter (Q1FY22), which is slated to be released later in the day. In opening trades, Sensex advanced by 131 points or 0.23% to a new peak of 57,021 while the Nifty 50 was trading at a record high of 16,961 higher by 30 points or 0.18%.

“A distinguishing feature of this bull market which started in April 2020 is that it has been remarkably stable without any major correction. So, the newbie retail investors who entered the market since April 2020 (1.42 cr new Demat accounts opened in FY21) have been buying every dip, successfully. Now, with the Fed giving a commentary favourable to bulls, momentum is likely to take the Nifty to 17000. The flip side of this relentless bull run is the excessive valuation, which exposes the market to an unexpected sharp correction. This market has proved skeptics wrong, till now. Even while enjoying the party, investors should be prepared for a sharp correction. Partial profit booking is never a bad idea. IT stocks have turned a bit weak, perhaps due to dollar appreciation. But experience tells us that the performance of IT companies depends more on the deal wins than the exchange rate. So dips can be used to buy,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Gainers & losers

Top gainers & losers on the Sensex.

Sectoral indices

Sectorally all indices opened mixed on the NSE. Nifty IT index surged almost a percent. While Nifty Realty and Nifty Pharma indices were rose 0.60% and 0.45% respectively. Nifty FMCG index was up about 0.16%.

On the downside, Nifty Metal, Nifty Auto and Nifty Bank indices lost up to 0.33%.

Broader market

Broader markets opened higher. The BSE MidCap index hit a fresh lifetime high of 23,740 in opening trades and the BSE SmallCap index was quoting at 26,842 up by 152 points or 0.57%.

The market breadth was positive as 1,556 shares advanced compared to 711 declined and 104 remained unchanged.

Global markets

Overseas, Asian stocks are mostly trading lower on Tuesday, as data showed slowing Chinese factory activity growth in August.

China’s factory activity grew at a slower pace in August as compared with the previous month, data released Tuesday showed. The official manufacturing Purchasing Managers’ Index for August came in at 50.1, against July’s reading of 50.4.

In US, the S&P 500 and Nasdaq hit record highs on Monday as technology stocks jumped after the Federal Reserve’s dovish comments eased fears of a sudden tapering in monetary stimulus and boosted optimism around an economic recovery.