Nifty 50 scales fresh record highs; tops 20k-mark as investors shrug off global jitters on strong macros

The broader market is also showcasing a stellar bull run, with both the Nifty Smallcap 100 and Nifty Midcap 100 sitting on record highs.

The benchmark Nifty 50 shrugged off subdued global cues and outperformed their overseas peers to scale a fresh record high, surpassing the 20,000-mark for the first time ever on September 11.

At 3.12 pm, the Nifty 50 was trading 0.9 percent higher at 19,997.85 after hitting a record high of 20,002. The Sensex too was up 0.8 percent at 67,130.59, at just a kissing distance from its record high of 67,619.17.

Indian benchmark indices, the 30-stock Sensex and the Nifty 50 rose over 2 percent each last week. Strong domestic macroeconomic data, a breather in August, and resilient buying from domestic institutional investors were the primary factors behind the rally.

"Domestic indices experienced a gradual rally throughout the past week, buoyed by strong domestic macroeconomic data such as robust GDP and PMI figures, which painted a positive outlook for the domestic market. Despite a mixed global trend marked by weak cues, Indian equities remained resilient, supported by this strong economic outlook," said Vinod Nair, Head of Research at Geojit Financial Services.

Amol Athawale, vice-president of technical research at Kotak Securities, highlighted that a lack of opportunity in key economies is also prompting investors to increase their bets on India. "Investors are increasing exposure to stocks of companies that are likely to play a major role in boosting the economy," he said.

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What's more remarkable is that the gains came despite a spike in Brent crude prices, a rise in the dollar index, a surge in yields on the US benchmark 10-year bonds, and continuous selling by foreign institutional investors. Foreign institutions sold Indian equities worth Rs 9,321.41 crore over the past week, while domestic institutional investors firmed up their investments and bought equities worth Rs 4,572.14 crore.

"From a technical perspective, the Nifty has recently broken out of a bullish flag formation, suggesting the potential for a significant upward move," said Santosh Meena, research head at Swastika Investmart.

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However, Meena also highlighted that the Nifty 50 faces a critical psychological hurdle at the 20,000 mark, which currently acts as a key resistance level. If Nifty struggles to breach this level, he sees the possibility of another round of profit-booking, while on the downside, he pegged the range of 19,600–19,500 as a robust demand zone, providing support.

It was not just the benchmarks that had a week of remarkable rally, the broader market too enjoyed stellar gains. The Nifty Smallcap 100 and Nifty Midcap 100 indices outperformed the benchmarks and scaled fresh lifetime highs through the week. Both the indices extended their gains to set fresh record highs in today's session as well.

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"In the broader market, midcap and smallcap stocks attracted strong buying interest, even though their valuations were relatively high as heightened order inflows made sectors like infrastructure and realty particularly attractive to investors during the week," Nair said.

Given the sharp gains in the broader market in recent weeks, coupled with selling from FIIs, Meena suggested investors exhibit some caution in the smallcap and midcap space, anticipating profit-booking. However, most analysts do suggest taking any dip in the broader market as an opportunity to lap up quality stocks.

Also Read | Kotak adjusts portfolio as it fails to find non-BFSI shares with good potential

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