D-St bulls charge again: Nifty scales fresh record high, eyes 22,000; Sensex up nearly 500 points

At a time when markets are devoid of much action due to holidays, they are exhibiting strong moves, said analysts.

Bulls returned to rule the Street on December 27, backed by strong global cues. The BSE Sensex zoomed to over 71,800 as of afternoon trade, just 95 points shy of scaling record highs, while the NSE Nifty 50 hit fresh all-time high of  21594.05 points.

At a time when the markets run low because of the holidays, the Indian benchmarks are putting up strong moves, analysts said.

"The resilience of the market even in the holiday season, which is normally devoid of much action, is an indication of its underlying bullishness," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Much support for the domestic markets was lent from the US where the S&P 500 index neared all-time highs. Dow Jones and tech-heavy NASDAQ Composite climbed as much as 0.6 percent.

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Vaishali Parekh, vice-president of technical research at Prabhudas Lilladher, warned investors of rising bouts of volatility. India VIX, which measures market volatility, was up over 3 percent at 15.16, as of 11.44 am.

Overall, Parekh of Prabhudas Lilladher said that some sideways movement may be possible and resorted to a 'wait and watch' scenario.

For NSE Nifty 50, she told Moneycontrol that all levers were in place to cross the previous high. "Once we breach Nifty 50's previous record high, we can eye 22,000 levels," Parekh  said.

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As of afternoon trade, broader indices also fared well, outperforming the benchmarks. Nifty Midcap 100 and Nifty Smallcap 100 surged 0.5 percent and 0.7 percent.

But, analysts continue to flag over-excessive valuations in these segments. "A correction in broader market is inevitable," said Vijayakumar.

All sectors swam in a sea of green on December 27. The leaders among the pack emerged to be PSU Bank and Metals. Both these sectors gained over 1 percent each in the morning deals.

PSU Banks, particularly, are well-poised for a re-rating, said analysts at Motilal Oswal in their earlier note. "Several public sector banks have raised capital from the market and have shored up their capitalisation levels, which will enable healthy balance sheet growth, particularly as the capex cycle recovers after the general elections. We, thus, believe that sustained and consistent performance on return ratios and a conducive macros can drive further re-rating of the sector," it said.

Overall, analysts recommend traders to adopt the strategic buy-in-dips in order to capitalise on the upward momentum in the market.

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