Taking Stock | Sensex, Nifty scale fresh peaks, jump 2% higher for the week

After the two consecutive sessions of losses, the Indian equity market resumed its upward march with hefty gains on January 8 as investors lapped up shares of IT, auto and mid-caps.

Nifty hit its fresh record high of 14,367.30 while the Sensex hit a record high of 48,854.34 in intraday trade.

Eventually, the Sensex closed 689 points, or 1.43 percent, up at 48,782.51 and Nifty settled 210 points, or 1.48 percent, up at 14,347.25.

The rally in the market was broad-based as the mid-cap and small-cap indices clocked gains of about a percent.

BSE Midcap index hit a fresh record high of 19,161.20 while the Smallcap index hit an intraday high of 18,984.69. The Smallcap index is still about 1,200 points below its all-time high of 20,183.45 that it hit on January 15, 2018.

BSE Midcap and Smallcap indices closed 1.01 percent and 0.72 percent higher, respectively, on January 8.

The overall market capitalisation of BSE-listed firms jumped to a record Rs 195.7 lakh crore from Rs 193.2 lakh crore in the previous session, making investors richer by Rs 2.5 lakh crore in a single day.

"IT and auto stocks pulled their weight today ahead of TCS earnings as bulls went berserk, lifting indices by 1.5 percent buoyed by positive global cues. An array of high-quality mid-caps across sectors registered smart gains as mood remained buoyant through the day," said S Ranganathan, Head of Research at LKP Securities.

For the week, Sensex jumped 1.91 percent while Nifty clocked a gain of 2.35 percent.

Quarterly earnings and global cues are expected to dictate the market movement.

"Markets will first react to TCS numbers in early trades on Monday. Besides earnings, global cues and updates on vaccine drive will also remain in focus," said Ajit Mishra, VP - Research, Religare Broking.

"At present, the rotational buying across the sectors is helping the index to inch higher and we suggest aligning positions according to the trend. However, traders should avoid going overboard and keep a check on leveraged positions."

"Technically, the Nifty index has been trading in a rising broadening formation and the upper band of the pattern currently lies around 14,500, which may act as an immediate hurdle," said Mishra.

Barring BSE Metal (down 0.91 percent) and Telecom (down 0.49 percent), all sectoral indices closed with gains, with IT, Auto and Teck indices jumping over 3 percent each.

More than 480 stocks, including Asian Paints, HCL Tech, Infosys, Mahindra & Mahindra, Maruti Suzuki, Sun Pharma, TCS, Tech Mahindra and UltraTech Cement, hit their 52-week highs.

As many as 500 stocks, including Jammu & Kashmir Bank, Borosil Renewables, Majesco, Ujaas Energy and Greenpanel Industries, hit their upper circuits on BSE.

A volume spike of more than 200 percent was seen in stocks such as Torrent Power, Maruti Suzuki, Zee Entertainment, SBI Life Insurance and Sun Pharma.

The stocks of Maruti Suzuki, Wipro and MRF were among those who witnessed long build-up while IDFC First Bank, Mahindra & Mahindra Financial Services and Vedanta were among the stocks that witnessed short build-up.

Nifty formed a bullish candle on the daily as well as weekly charts as closing was higher than opening levels.

Experts feel the current momentum if sustains can take the Nifty beyond 14,500 mark in coming sessions.

Mazhar Mohammad of Chartviewindia.in advised index traders with a high-risk appetite to go long by making use of intraday dip towards 14,250 levels with a stop below 14,200 and look for a modest target placed in the zone of 14,450 – 14,500 levels.

"Bulls continued their relentless strength after a brief pause of two sessions only to hit yet another milestone with the first-ever close above 14,300 levels. In this process strength in the markets continued for the 10th week, without any meaningful correction, from the lows of 11,557 levels which makes the bulls vulnerable for sudden and sharp falls," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.

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