Sensex closes 500 points higher, Nifty records new peak

Benchmark indices closed 1 per cent higher with Nifty continuing to scale new peaks for the third successive day.

Market after a volatile first half, turned positive in the afternoon on Monday and rallied further in the second half after bulls took charge. The rally was led by index heavyweight Reliance Industries.

Hopes of economic recovery and foreign portfolio investors turning buyers amidst declining Covid caseloads buoyed the market.

After registering another new all-time high at 15,606.35, the Nifty 50 closed at 15,582.80, up 147.15 points or 0.95 per cent. The benchmark touched a low of 15,374. The BSE Sensex after breaching the 52,000-mark with an intraday high of 52,013.22, closed at 51,937.44, up 514.56 points or one per cent. It hit an intraday low of 51,179.94.

The breadth of the market also turned positive with 1,744 stocks advancing, 1,492 declining, and 191 remaining unchanged on the BSE. As many as 466 securities hit the upper circuit and 288 the lower circuit; 334 hit their 52-week high while 48 touched a 52-week low.

Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities remained upbeat with benchmark Nifty recording gains for seventh consecutive day. Improving prospects of economic recovery with continued decline in daily caseload in the second wave and gradual withdrawal of restrictions announced by several states bolstered confidence among investors.”

“Financials and Reliance Industries once again supported the market's rally. Additionally, buying was seen in FMCG and Metals stocks,” Modi said.

Investment advisory firm Jefferies last week said RIL's earnings before interest, tax, depreciation and amortisation (EBITDA) for petrochemical business is likely to rise 50 per cent if the prevailing momentum sustains.

This could drive a 14 per cent upside on the consolidated EBIDTA estimate.

JSW Steel, ICICI Bank, Reliance, Bharti Airtel and Tata Steel were the top gainers on the Nifty 50 while Mahindra & Mahindra, Adani Ports, HDFC Life, IOC and IndusInd Bank were among the top laggards.

According to Modi, GDP data for Q4 2021 and the outcome of the RBI policy meeting will be crucial for the market this week.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said: “Indian markets opened mixed following mixed Asian market cues as investors reacted to the release of economic data where Japan reported weaker-than-expected growth in factory output and Chinese manufacturing growth was almost flat.”

“During the afternoon session markets continued to trade in high spirit in the afternoon session, on account of broad based buying in blue chip counters,” said Solanki.

Auto, IT and PSU stocks face pressure

On the sectoral front, Auto, IT and PSU Bank stocks remained under pressure. The Nifty PSU Bank index was the major loser by declining 0.69 per cent. The Nifty Auto index was down 0.18 per cent while the Nifty IT index edged down by just 0.03 per cent.

However, Nifty Bank and Nifty Private Bank were up 1.10 and 1.09 per cent, respectively.

Meanwhile metal stocks gained further in the second half. Realty and FMCG stocks also performed well.

Nifty Metal was up 2.10 per cent at closing. Nifty Realty was up 1.37 per cent. Nifty FMCG was up 1.01 per cent.

Broader indices

Though broader indices ended the day in the green, they underperformed the BSE Sensex and the Nifty. The Nifty Midcap 50 was up 0.08 per cent while Nifty Smallcap 50 was up 0.37 per cent.

The S&P BSE Midcap was up 0.45 per cent while the S&P BSE Smallcap was up 0.50 per cent.

Notably, the volatility index was down 2.97 per cent to 16.89.

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