Sensex, Nifty hit new lifetime highs in early trades

Ignoring global cues benchmark domestic equity indices opened higher on Friday hitting a new record high in intra-day deals. In opening trades, Sensex rose 115 points or 0.22% at 53,274 after hitting a new peak of 53,290 likewise Nifty 50 touched a record high of 15,962 and was quoting at 15,950 advancing 26 points or 0.21%. 

“The ongoing global bull run, which has baffled even the best of experts, is unique. The unprecedented huge liquidity created by the leading central banks and the undue influence being exerted on the market by the exploding number of newbie retail investors has rendered traditional market valuation models less significant than during normal times. But the principles of economics, finance & markets will exert themselves strongly when normalcy returns,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

“The principles of economics, finance & markets will exert themselves strongly when normalcy returns. It is simply common sense that central banks will have to end their loose monetary policy and rebalance their balance sheets at some point in time. When that happens, interest rates will go up and the equity markets will correct sharply. Since we don’t know when this is going to happen, the party is going on. While enjoying the party, investors should also apply restraint. Don’t chase mid-small-caps that are in bubble territory. While Nifty is up 13.89 % YTD, the Mid-cap and Small-cap indices are up 33.16% and 45.79% YTD respectively. Hyper retail enthusiasm and very low institutional activity in this segment are causing this irrational exuberance. History tells us that this will not last,” added Vijayakumar.

Gainers & losers

Top gainers & losers on Sensex

Sectoral strand

Sectorally indices were trading mixed, Nifty Pharma index advanced 0.94%, Nifty Metal rose 0.35% and Nifty FMCG was up 0.23%. On the downside, the Nifty Bank index lost 0.22%, while the Nifty IT index 0.17% and Nifty Auto opened with a marginal loss of 0.01%.

Broader market

The broader market was trading higher with BSE MidCap trading at 0.11% at 23,022 after hitting a lifetime high of 23,099. Even the BSE SmallCap index hit a new lifetime high of 26,492 and was quoting 26,482 higher by 0.45%.

The market breadth was strong as 1,228 stocks advanced compared to 549 shares declined and 479 scrips remained unchanged.

Earnings today

HDFC Asset Management Company, Den Networks, GNA Axles, Just Dial, L&T Finance Holdings, Maximaa Systems, Starlog Enterprises, and Visagar Polytex will release quarterly earnings on today.

Global markets

Overseas, Asian stocks are trading mixed on Friday as concerns about the economic growth outlook came to the fore. Investors await the Bank of Japan’s monetary policy statement.

US stocks indexes fell on Thursday as energy and technology stocks declined.

Federal Reserve Chair Jerome Powell on Thursday maintained the central bank will continue to evaluate the economic recovery before changing its accommodating monetary policies. The Fed chair spoke before the Senate banking panel in the second day of testimony before Congress.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast for a strong recovery in world oil demand in the rest of 2021 and predicted oil use would rise further in 2022 similar to pre-pandemic rates, led by growth in China and India.

“In 2022, healthy expectations for global economic growth in addition to improved containment of COVID-19 through the acceleration of vaccination programmes, effective treatment and natural immunisation, particularly in emerging and developing countries, along with frequent testing procedures, are assumed to spur consumption of oil next year to comparable pre-pandemic levels,” OPEC said in the report.