Sensex soars past 55,000-mark for the first time, Nifty above 16,400

Benchmark equity indices opened at record levels on Friday as investor sentiment was upbeat after retail inflation eased to a three-month low in July while Industrial output for the month of June rose 13.6%. In early deals, Sensex rose 237 points or 0.43% to 55,081, while Nifty 50 advanced 58 points or 0.36% to 16,422 .

“The bull is showing no signs of fatigue as the Nifty raced to another record close at 16364. Global support to the rally is intact with the Dow and S&P setting yet another record high. Retail investors relentlessly chasing stocks and the sheer momentum in the market may take the Nifty to 16500 levels. If the Nifty makes the move to 16500 levels, it is likely to be led by the leading high-quality private banks and leading IT names,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The newbie retail investors are buying stocks without any serious consideration for value. Now, we don’t know when and how this rally will end. But we know it will end, and when it does the new retail investors who have flocked to the market recently will be hit hard. The decline in CPI inflation to 5.59% in July from 6.26% in June will give comfort to the RBI to continue with its loose monetary policy and accommodative monetary stance, Vijayakumar added.

Gainer & losers

Top gainers & losers on the Sensex.

Sectoral strand

Sectoral indices open mixed with the Nifty Bank index rising the most 0.48%. Nifty Realty, Nifty Auto, Nifty FMCG and Nifty IT indices rose in the range 0.13-0.25%.

On the downside, Nifty Pharma and Nifty Metal indices lost 0.16% and 0.11% respectively.

Broader market

After a strong comeback in yesterday’s session, broader markets underperformed benchmark indices.  The BSE MidCap index opened with marginal gains of 0.15% to 22,989 level and the BSE SmallCap index was trading at 26,460 up by 0.39%.

The market breadth remained in the favor of bulls as 1,646 shares advanced compared to 807 declined and 83 remained unchanged.

Economy

India’s retail inflation eased to a three-month low in July on the back of softening food prices. The consumer price index (CPI) based inflation cooled to 5.59% in the last month from 6.26% in June, government data released on Thursday showed. Food inflation fell substantially to 3.96% in July from 5.15% in June.

Meanwhile, Industrial activity was affected due to the nationwide Covid lockdown last year in April and May but had picked up June onwards. Industrial output for the month of June rose 13.6%. Factory output, measured by the Index of Industrial Production (IIP) had contracted 16.6% in the same month of last year and rose by 29.3% in May.

Earnings today

Godrej Industries, Grasim Industries, NBCC (India), NHPC, Oil and Natural Gas Corporation, Hindustan Aeronautics, Indraprastha Gas, Inox Wind, Burger King India, Sun TV Network, Allcargo Logistics, Archies, D B Corp, Gayatri Projects, Glenmark Pharmaceuticals, Gujarat Mineral Development Corporation, GMR Infrastructure, Godfrey Phillips India, Indian Railway Finance Corporation, IL&FS Investment Managers, Inox Wind Energy, Jammu & Kashmir Bank, Jagran Prakashan, Madhucon Projects, Maharashtra Seamless, Mawana Sugars, Orbit Exports, Orchid Pharma, Petronet LNG, SEAMEC, Sintex Industries, Suven Pharmaceuticals, Suzlon Energy, Tide Water Oil (INDIA), Ucal Fuel Systems, Uttam Galva Steels, Visa Steel, Vivimed Labs and ZEE Learn are set to release their April to June quarter earnings today.

Global markets

Overseas, Asian stocks are trading lower on Friday as the spread of the delta Covid-19 variant and China’s regulatory curbs restrained sentiment despite another record high close on Wall Street.

In US, the Dow and S&P 500 jumped to record closes for a third straight day on Thursday, with mega-cap technology stocks driving the market higher as investors warmed to jobs data showing a steady US economic recovery.