Sensex zooms 663 points, Nifty ends above 17,100; metals, IT stocks shine

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Domestic benchmark equities indices continued their record run on Tuesday ahead of the GDP numbers, as investors looked confident about ongoing economic recovery. Sensex advanced 663 points, or 1.16%, to a new closing high of 57,552. Likewise, Nifty 50, ended at record 17,132.20, up 201.15 points or 1.19%.

Today’s rally made investor’s richer by Rs 2.69 lakh crore and the market capitalisation of all BSE listed companies touched Rs 250 lakh crore.

“Nifty has scaled a new high today, touching the 17000 level for the first time. This rally from 16000 to 17000 has been the second fastest 1000pt up move in Nifty from last year’s low. One of the key reasons for the rally since yesterday has been recent suggestions from Fed Chair Powell that the Fed is in no hurry to hike interest rates. This, in turn, has fuelled the rally in risk assets, underpinning our markets as well,” said Abhishek Chinchalkar of FYERS.

The prevailing momentum across the board is strong, with midcaps and smallcaps also joining in the rally following the recent correction. If Nifty sustains above 17000 today, the up move is likely to extend towards 17200 in the next 2-3 days, Chinchalkar added.

Gainers & losers

Sectoral strand

All sectoral indices on the NSE barring Nifty Media closed in the green. Nifty Metal, closing 1.5% higher, was the top sectoral gainer followed by Nifty IT, up 1.35% and the Nifty FMCG, rallying nearly 1%. Nifty Pharma, Nifty Auto, Nifty Realty and Nifty Bank indices rose up to 0.86%.

Broader market

Broader markets underperformed benchmark indices. The BSE MidCap index ended at record highs of 23,853 advancing 197 points or 0.83% after scaling to a new peak of 23,872. The BSE SmallCap index settled at 26,919 up by 229 points or 0.86%.

However, the market breadth turned negative as 1,624 shares declined compared to 1,574 advanced and 143 remained unchanged.

Sebi’s margin rule

Market regulator Securities and Exchange Board of India’s (SEBI) new margin rules will come into effect from Wednesday (1 September 2021). Under the new peak margin rule, traders will be required to give 100% margin upfront for their trades. As per the new peak margin norms, the margin requirements will be calculated four times during every trading session. It will also include intraday trading positions. The peak margin norms were introduced last year to curb speculative trading and restrict leverages offered by stockbrokers to their clients.

Economy

India’s gross domestic product (GDP) for the April-June (Q1) quarter of the ongoing fiscal will be released today, 31 August 2021. India’s GDP for the fourth quarter (Q4) of 2020-21 reported expected growth of 1.6%.

Global markets

Most European shares were trading higher while Asian shares rose across the board on Tuesday, 31 August 2021, 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 on Tuesday showed. The official manufacturing Purchasing Managers’ Index for August came in at 50.1, against July’s reading of 50.4.

In the US market, 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.