New record high! Sensex, Nifty scale new peaks

Indian equities closed Tuesday’s trading session at a new record high once again, backed by strong buying in banking and technology stocks. The markets also followed cues coming out of Asia where markets were trading in the green responding to the US fiscal stimulus and Brexit trade developments.

The benchmark Nifty rallied by 59.4 points (0.43%) to close at 13932.6 whereas Sensex rallied by 259.3 points (0.55%) to close at 47,613.08.

The Indian markets started the trading session with record highs. The gains in the markets were capped as investors booked some profit during the day’s trading session. The markets have closed at record highs for 15 out of 20 trading sessions in December.

The European markets in countries such as Germany, France and the United Kingdom were up between 0.26% to 2.1%. The Asian markets in South Korea, Hong Kong and Japan were up between 0.42% to 2.6%.

The markets were responding to the fiscal stimulus signed by president Donald Trump. The developments around the Brexit trade deal have also kept the global markets buoyant in the last few trading sessions.

Indian markets, which followed global cues, were also propelled higher by buying in banking and technology stocks.

The Nifty Bank rose by as much as 1.43% and the biggest gainers on the index were IndusInd Bank, Punjab National Bank, Axis Bank, ICICI Bank, and Bandhan Bank up by 5.72%, 2.78%, 2.06%, 1.92%, and 1.81%. The Nifty Bank has risen by 3.57% till date in December, which is an underperformance compared to Nifty which has risen by 6.2% for the same period.

In its report, Kotak Institutional Equities stated while banks have been recovering, the loan growth could be slower than expected. In its report, the brokerage, said, “The current progress on loans suggests loan growth is likely to be slower than what is expected by market participants. Early delinquencies have jumped in credit cards.”

According to experts, calendar year (CY) 2021 is likely to see the start of another earnings upgrade cycle as the economy starts to recover. Further liquidity flows across emerging markets (EMs) could remain strong which bodes well for Indian markets.

Motilal Oswal Financial Services, said, “As we enter 2021, the markets are sitting at all-time high and are showing resilience on the back of abundant liquidity, positive developments on the vaccine front and signs of economic recovery. More importantly, Covid-19 cases have seen a meaningful decline.” The brokerage expects Nifty earnings per share (EPS) growth of 6.9% in FY21 while expecting a sharp rebound of 36.2% in FY22.

Foreign portfolio investors have in December pumped in capital worth $6.1 billion in total in Indian equities. According to provisional data on the exchanges, the FPIs have bought stocks worth $313.27 million. The futures and options segment on the NSE saw a turnover worth Rs 23.91 lakh crore and the cash market saw a turnover worth Rs 51,692.59 crore. This is against the six month average of Rs 21.7 lakh crore in the futures and options segment as well as Rs 59,316 crore in the cash market segment.

The biggest gainers on the Nifty were IndusInd Bank, Tech Mahindra, Axis Bank, ICICI Bank and HCL Technologies up by 5.72%, 2.19%, 2.06%, 1.92%, and 1.54%. The biggest losers on the Nifty were Hindalco, Nestle India, Coal India, Tata Motors, and NTPC, down by 2.08%, 1.76%, 1.67%, 1.53%, and 1.44%.