Sensex, Nifty inch closer to all-time highs, analysts expect momentum to sustain

Stock market today

The benchmark Sensex and Nifty 50 started the session on April 30 on a tepid note, taking a breather after the sharp gains on the previous day. However, investors were quick to shrug off early jitters, helping the two benchmarks march towards new peaks. Positive cues from global markets and robust set of Q4 earnings from most companies also aided sentiment for domestic equities.

However, some caution will still persist in the run-up top the FOMC meet, slated to begin later today.

After the tepid start, the Sensex managed to reclaim the 75,000-mark and the Nifty climbed back above the 22,700-level. With this, the 30-stock Sensex and the Nifty 50 stand at a kissing distance of their respective record highs.

At 10.11 am, the Sensex was up 204.69 points or 0.27 percent at 74,875.97, and the Nifty was up 71.30 points or 0.31 percent at 22,714.70.

The market breadth titled sharply in favour of gainers as around two stocks rose for each that fell. About 1,892 shares rose, 1,088 fell, while 93 remained unchanged.

"This bull market is remaining resilient despite headwinds, and is slowly gathering momentum despite high valuations. A significant feature of the ongoing bull run is that the FIIs are consistently being outsmarted by the DIIs and retail investors, V K Vijayakumar, chief investment strategist, Geojit Financial Services noted.

Vijayakumar also feels that trend of DII as well as retail investors buying together has been completely overwhelming the FII selling, forcing them to buy the same stocks they sold earlier at higher prices later.

The takeaway from this trend, according to Vijayakumar is that the bulls are calling the shots in this market and, therefore, he believes every dip will likely be bought.

Uptick anticipated

Analysts see the positive market breadth as an indicator of the bullish bias persisting among investors. Given the bullish bias, analysts foresee the positive momentum to lift the indices to fresh record highs.

"The Nifty 50 is anticipated to venture into uncharted territory in the near future. Therefore, traders are advised to maintain a positive stance and view dips as buying opportunities," said Sameet Chavan, head- technical and derivative at Angel One.

Shrey Jain, founder and CEO SAS Online, also shares a similar view as he  believes the momentum in the market appears poised to push the Nifty 50 towards the 22,850 mark, with significant support anticipated at 22,550.

Meanwhile, the Nifty Bank index also extended its uptrend and scaled a new high of 49,672.85. The index had posted its biggest single-day gain since December 2023 in the previous session as it surged 2.5 percent.

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"The banking index appears firmly under the control of buyers, having broken above its prior all-time high levels and ventured into unchartered
territory," Chavan said.

He also sees a shift in the constituents that led the banking index to new highs. "Previously, the index was predominantly led by PSU bank stocks, with most gains originating from them. However, yesterday marked a positive shift in participation, as private banking stocks began to contribute, driving most of the gains," he noted.

According to Chavan, this change bodes well for rate-sensitive index and suggests an encouraging outlook for it, forecasting higher levels in the near future.

Stocks and sectors

Sharp gains in automobile stocks led the rally for the two benchmarks. Shares of Mahindra & Mahindra surged around 4 percent to emerge as the top gainer on the Nifty 50 buoyed by the management's aspirations to achieve the first or second spot in the compact SUV segment.

Other auto stocks like Bajaj Auto, Tata Motors and Hero MotoCorp also rose around 2 percent each to lift the Nifty Auto index over 2 percent higher.

The broader market also showcased positive momentum as the BSE Smallcap index rose 0.5 percent while the BSE Midcap was up 0.7 percent. Most sectors also traded in the green, with the exception of information technology and metals that traded largely flat.

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