Firecrackers on D-St! Sensex reclaims Mount 32K; over 130 stocks hit fresh 52-week high

With just a week left for Diwali, benchmark indices are slowly moving towards their record highs. The S&P BSE Sensex reclaimed its crucial resistance level of 32,000 in morning trade.

The S&P BSE Sensex rose over 150 points but there was plenty of action in individual stocks. Tracking the momentum, as many as 135 stocks hit a fresh 52-weeks high on the BSE.

Stocks which surged to a fresh 52-week high on the BSE include names like 63 Moons, Andhra Petrochemicals, APL Apollo Tubes, Bharat Financial, Bata India, TVS Motors Company, Bharat Forge, Havells India, Coromandel International etc. among others.

As many as 51 stocks hit a fresh record high on the BSE which include names like Siyaram Silk Mills, IGL, HEG, DMart, Jindal Worldwide Ltd, Tata Chemicals, Goa Carbon, Cochin Shipyard, PSP Projects, GNFC, Lumax Auto Technologies etc. among others.

Small in midcap stocks continue with their uptrend for the third straight day this week. The S&P BSE Smallcap index and the S&P BSE Midcap index were trading over 0.5 percent each.

Stocks hitting fresh 52-week high mostly belong to the broader market but experts advise an investor to turn cautious towards this space because valuations could be a concern.

“Valuations, at the end of the day, are determined by factors such as the quality of earnings, the predictability of those earnings and the staying power of companies,” Nitasha Shankar, Sr. Vice President and Head of Research, YES Securities (I) Ltd told Moneycontrol.

“Instead of classifying stocks as mid, small or largecap in nature, one would do better to look at valuations in conjunction with quantitative & qualitative aspects like financial ratios, balance sheet strength, stance in industry, pricing power, the changing industry dynamics, competitive pressures, amongst others,” she said.

The Nifty50 rose above its crucial psychological resistance level of 10,050 led by gains in Bharti Airtel, Bharti Infratel, Bajaj Auto, Aurobindo Pharma, Axis Bank, HPCL etc.

Tracking the momentum, as many as 107 stocks hit a fresh 52-week high on the NSE which include names like Gillette India, Bajaj Auto, APL Apollo Tube, Motilal Oswal, HIL, Mahanagar Gas, Birla Corp, MM Forging, Dilip Buildcon etc. among others.

The index is now just a little over 100 points away from hitting a fresh record high of 10,178 but analysts' do not see a breakout even if Nifty reclaims record high level.

After the Nifty clocked 10,000 for the first time in July, the index, along with the overall market, has witnessed a consolidation phase. JM Financial’s Gautam Shah believes that the market action in the past three months has been very confusing.

“But there is clarity on one aspect that this is clearly a battle between liquidity and valuations. At 9700-9800, liquidity support is seen, while around 10,100-odd levels, overseas investors come into play and restrict the upmove,” Shah, Associate Director and Technical Analyst at JM Financial told CNBC-TV18 in an interview.

This kind of a move, amid a positive environment, is discouraging as the Nifty has not made higher highs due to selling pressure. His sense is that the current recovery is a relief rally and a temporary one and it could end once the Nifty hovers around 10,100 levels.