The Nifty scaled a new high of 19,991.85, beating its previous record of 19,851.70. The gauge of top 50 companies ended at 19,979.15, up 146 points or 0.74% from the previous close. The Sensex topped 67,619.17 in Thursday’s trading, surpassing Wednesday’s all-time high of 67,171.38. The index closed at 67,571.90, up 474.46 points or 0.71% from the previous record closing high of 67,097.44.
“Technically, our markets are overbought at the moment and they will remain in the overbought zone for some more time,” said Andrew Holland, CEO, Avendus Capital Public Markets Alternate Strategies LLP. “The liquidity and momentum are so strong you cannot fight them.”
Broader Markets Also Rise
Holland, who had expected the Nifty to touch 20,000 by April next year when the index was hovering at 18,000, is cautious given the steep rise in a short span of time.
“All the positive catalysts have played out for now,” Holland said.
“We continue to look over the shoulder for the next catalyst that could take the markets down. Something will cause a correction because the markets have gone up too high too fast.”
On Thursday, foreign portfolio investors (FPIs) were net buyers in the cash segment for the sixth consecutive session. Overseas investors bought shares worth Rs 3,370.90 crore, showed provisional stock exchange data.
Since the lows of March, FPIs have pumped over Rs 85,000 crore into Indian equities. This has helped benchmark indices surge 18% in the last four months, outperforming global peers.
Oil-to-telecom conglomerate RIL, which is the second-highest weighted stock, extended gains for the fourth straight session after the valuation of spun-off unit Jio Financial Services (JFS) was pegged at a much higher level than market expectations.
Shares of JFS were priced at Rs 261.85, much higher than Rs 160-200 per share estimated by the market.
The Bank Nifty index gained 1.1% to post a new high of 46,256.20 on Thursday led by Kotak Mahindra Bank (2.62%) and followed by ICICI Bank (2.19%), SBI (1.42%) and Axis Bank (1.32%).
Diversified consumer giant ITC was top gainer (2.78%) among the frontline stocks, advancing 2.6% to an all-time high of Rs 491.50, helping the Nifty FMCG index rise more than 1.3%, making it the top sectoral gainer in Thursday’s trade.
The broader markets also rose – the Nifty Midcap 150 index made a new high after rising 0.2%.
The positive sentiment in local shares reflects the bullish undertone in global equities. Overnight, three major US indices saw a positive close with the Dow Jones Industrial Average registering its longest winning streak in nearly four years.
“We all agree what a bull market looks like, and objectively, we’re in one now,” said David Lundgren, portfolio manager of a private long/short equity hedge fund and chief market strategist at Boston-based MOTR Capital Management and Research, Inc. “If you’re struggling with this, then you’re telling the market what you want, as opposed to accepting what the market is giving you.”