A stellar show by banking stocks, especially the public sector banks (PSBs), boosted Indian market sentiment on September 16, pushing key equity indices to fresh record levels even as global cues remained mixed.
After a positive start, the Sensex briefly slipped into the red in the early hours of trade. However, it bounced back, adding gains to top the 59,000-mark for the first time and making a fresh peak of 59,204.29. The Nifty made a fresh peak of 17,644.60 in intraday trade.
The Sensex closed up 418 points, or 0.71 percent, at 59,141.16 while the Nifty settled at 17,629.50, up 110 points or 0.63 percent. With this, the market extended gains into the third consecutive session.
BSE Midcap and smallcap indices also hit fresh record highs of 25,384.22 and 28,456.77, respectively, in intraday trade. BSE Midcap index closed 0.48 percent higher at 25,336.56 while the smallcap index closed 0.08 percent up at 28,306.05.
The overall market capitalisation of BSE-listed firms jumped to Rs 2,60.80 lakh crore from Rs 259.7 lakh crore in the previous session, making investors richer by Rs 1.1 lakh crore in a single day.
The top trigger for today's rally was the strong gains in banking stocks. They gained on anticipation that Finance Minister Nirmala Sitharaman may make some announcement regarding the operationalisation of 'bad bank'.
Sitharaman had first announced the setting up of a ‘bad bank’ in her 2021-22 Union Budget Speech.
"It is generally seen that when an underperformer makes a much-awaited up-move, it creates a feel-good effect on others. Ahead of the operationalisation of the NARCL, banks provided the much-needed ammunition to the bulls to notch up record highs of 59,000 for the Sensex," said S Ranganathan, Head of Research at LKP securities.
"The charge of the energised bulls took India's market capitalisation ahead of France as PSU banks lent the firepower," Ranganathan pointed out.
Vinod Nair, Head of Research at Geojit Financial Services believes the banking sector may perform well in the coming days as the sector, which failed to fairly participate in the ongoing rally due to fear over asset quality is gaining traction now.
Sectors and stock
IndusInd Bank, ITC, SBI, Reliance Industries, Kotak Mahindra Bank, ICICI Bank and Axis Bank emerged as the top gainers in the Sensex index.
On the other hand, TCS, Tata Steel, Tech Mahindra, Bharti Airtel and HCL Tech ended as the top laggards in the index.
Among the sectors, the Nifty PSU Bank index jumped 5.43 percent while the Nifty Private Bank index clocked a gain of 2.67 percent. Nifty Bank index rose 2.22 percent.
On the flip side, the Nifty Media index fell 1.71 percent while the Nifty Metal and IT indices fell 0.62 percent each.
Some 286 stocks, including Bharti Airtel, IndusInd Bank, Larsen & Toubro, NTPC, ONGC, TCS and Titan, hit their fresh 52-week highs in intraday trade on BSE.
Nearly 400 stocks, including Zee Media Corporation, North Eastern Carrying Corporation, Inventure Growth & Securities, MRO-TEK Realty, Pritish Nandy Communications, Nureca, Indbank Merchant Banking Services, Urja Global, Techindia Nirman and Reliance Communications, hit their upper circuits in intraday trade on BSE.
Tech view
Despite weak Asian cues, domestic investors continued to bet big on Indian markets as recent data points showed steady economic revival is on track.
Nifty formed a bullish candle for the second consecutive day.
Technically, the index formed a robust breakout continuation formation and the short-term trend is extremely strong, said Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities.
"For the day traders, 17,540-17,580 levels would be the key support level to watch out for. Above it, the uptrend formation will continue up to 17,690-17,750 levels. On the flip side, Nifty would be vulnerable if it slips below 17,540," said Chouhan.
As per Rohit Singre, Senior Technical Analyst at LKP Securities, Nifty has further shifted its support to 17,565-17,500 zone.
"Now, holding above these levels, one can expect the index to trade with a positive bias and any dip near this mentioned supports will be again fresh buying opportunity. Fresh resistance is coming near 17,700-17,750 zone and overall, one can expect the index to march towards 18,000 mark," he said.
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