The Indian equity market bucked the subdued global market trend, with the benchmark Nifty extending gains to the sixth straight session to hit yet another all-time high. The Nifty added 126 points to the previous day's stellar gains to top the 20,800-mark on December 5 morning. Striding along, the Nifty Bank index also jumped nearly 2 percent to top the 47,000-mark for the first time.
The Nifty rallied around 4.4 percent in the past five days, with the most of the gains coming in the previous session. On the other hand, the Bank Nifty index has clocked in 4.4 percent gains in just the past two sessions.
At 10.30 am, the Nifty was up 144.90 points or 0.70 percent at 20,831.70., while the Bank Nifty, rose 1.7 percent to 47198.80.
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"The super Monday which delivered a 418-point rally in the Nifty is unlikely to be repeated with the same ferocity in the coming days but the market construct stays bullish. The massive institutional buying of above Rs 7000 crore yesterday is a reflection of institutional confidence in the Indian market," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Vijayakumar also said the market has the potential to go up by another 5 percent over the next few weeks. "Beyond that valuations will get stretched, inviting correction in the market," he added.
Gains in the Nifty were fueled by strong buying across heavyweight financial names such as HDFC Bank, ICICI Bank, and Axis Bank, which continued to witness strong investor interest.
Markets experts believe the heavy buying in banking names is on account of their reasonable valuations. Madhusudan Kela of MK Ventures also backed the view as he too feels the financial space has a favourable risk-reward as they did not meaningfully participate in the last 12-18 months.
Sunil Koul, Asia Pacific Portfolio Strategist at Goldman Sachs also stated having an overweight stance on Indian banks in an interaction with CNBC-TV18.
Meanwhile, analysts also expect the strong momentum in banking stocks to take the Nifty Bank index even higher towards levels of around 48,000.
“The momentum is likely to persist, with robust support identified at the 46,000-45,800 zone, serving as a cushion for the bulls. The ongoing momentum rally has the potential to propel the index higher towards the levels of 47,000-48,000," said Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities.
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