Benchmarks attain new closing records amid supportive macro data

Benchmarks rose to fresh all-time highs on Monday as investors bought energy, infra and banking stocks amid supportive macroeconomic cues. After touching its record intra-day peak of 46,373.34, the Sensex ended 154.45 points, or 0.34%, higher at 46,253.46, its new closing record. The Nifty rose 44.30 points, or 0.33%, to finish at a record 13,558.15. It hit a lifetime high of 13,597.50 during the session.

ONGC was the top gainer in the Sensex pack, rallying 4.91%, followed by L&T, NTPC, ICICI Bank, Sun Pharma, HCL Tech, Titan and Asian Paints. On the other hand, M&M, Bajaj Auto, Tech Mahindra, Bajaj Finserv, HDFC Bank and RIL were among the main laggards, dropping up to 1.98%.

So far in December, FPIs have bought stocks worth $3.9 billion even as domestic institutional investors have sold stocks worth Rs 20,347 crore. FPIs flows in 2020 have surpassed those in 2019 on the back of encouraging developments around Covid-19 vaccines and positive quarterly earnings.

Jefferies noted that the Indian market had outperformed other emerging markets last week. Jefferies said, “Nifty was up 1.9% previous week. It was one of the better performing markets in the region, outperforming EMs by 1.6%. FMCG and real estate were the relative outperformers, while autos and healthcare were the relative underperformers.”

Many foreign brokerages are overweight on India for 2021. BNP Paribas’s Asia strategy for 2021 said it continues to remain overweight on the Indian markets, adding that big companies getting bigger and selective recovery would be good for the Indian markets despite steep valuations. BNP Paribas said, “Compared with China, India had a relatively late impact from the Covid outbreak and is going through a corresponding late recovery. In fact, the recovery, though visible in some segments of the economy – rural incomes, automobile sales and non-food credit – is absent from urban consumption or banks’ asset quality. A common thread running between China and India is the focus on some long-range economic plans.”

The futures and options segment on Monday saw a turnover worth Rs 16.5 lakh crore and the cash market witnessed a turnover of Rs 56,663.70 crore. This is against the six-month average of Rs 59,316 crore in the cash market and Rs 21.7 lakh crore in the futures and options segment.

Global cues were mixed, with the markets in South Korea, Taiwan and Hong Kong declining by 0.2% to 0.4%. On the other hand, markets in the UK, Germany and France were up between 0.29% and 1.06% in early trade.

Shrikant Chouhan, executive vice president, equity technical research, Kotak Securities, said: “Amid the mixed cues from the global and domestic markets, the Nifty closed nominally at the higher side. Since the last three days, the market is closing nearer to opening levels, which is an indication of the indecisive nature of the market.”