Friyay! Nifty hits fresh record high: 3 key factors behind D-Street rally


Strong buying action in index heavyweight Reliance Industries and IT stocks drove Nifty50 hit fresh record highs on Friday. The index hit its highest level of 21,126.80 in the early afternoon session. Meanwhile, BSE Sensex surged as much as 1400 points today.

The bias was strongly skewed in favour of the bulls with 43 stocks trading in the green while seven in the red. The top gainers were Adani Ports and Special Economic Zone, BPCL, ICICI Bank, Coal India and Hero MotoCorps while the top losers were Eicher Motors, Larsen & Toubro, Maruti Suzuki, Power Grid and Britannia Industries.

Nifty Bank was trading over 1% or 490 points up at 46,680.75. The top gainer was ICICI Bank followed by Punjab National Bank (PNB). All sectoral indices barring Nifty Consumer Durables were trading in green. Nifty IT was trading at 37,057.70, higher by 1.43% while PSU banks were also on a high.

Among individual stocks, Shares of fintech major One 97 Communications, which runs Paytm, today crashed another 20% to lower circuit limit at Rs 487 on BSE after yesterday’s 20% slide after RBI barred Paytm Payments Bank from offering all kinds of banking services for non-compliances.

Here are top factors that aided the rally:

1. Global markets rise
Handover from the US markets was strong as the major headline indices on the Wall Street ended with robust gains. While Dow 30 ended at 38,519.80, up by 369.54 or 0.97%, S&P 500 settled at 4,906.19, higher by 60.54 points or 1.25%. Meanwhile, Nasdaq Composite jumped by over 197.63 points or 1.30% to end at 15,361.60 on Thursday.

Major Asian indices also traded in the green with Japan’s Nikkei 225 surging by 281.11 points or 0.78%. Hong Kong’s Hang Seng was up by 92 0.60%. However, China’s Shanghai Composite was trading in the red, declining by 0.72%.

2. RIL shares surge
Index heavyweight Reliance Industries (RIL) was instrumental in triggering today’s sharp uptick as the stock hit its fresh 52-week high of Rs 2,930.60 gaining 2.5% in the early morning trade.

3. Union Budget 2024
Markets reacted to the budget announcements as more clarity on the budget came following the speech by Finance Minister Nirmala Sitharaman. The government walked the path of fiscal prudence while vowing to bring down fiscal deficit to 4.5% by 2026. The government also indicated lower gross and net borrowing in the next financial year.

The budget was lauded by top brokerages including CLSA which called it “judicious” while BofA saying that “prudence trumps polulism”.

Expert Take
“In the upcoming session, the market may continue to respond to the aftermath of the budget announcement, with individual themes playing a significant role for traders seeking out performance opportunities. As the focus shifts from the key event, attention will revert to global developments, necessitating vigilance on the global front by traders,” Sameet Chavan, Head Research, Technical and Derivative at Angel One said ahead of te market opening.

In his view the Nifty is experiencing a pattern of alternating between up and down days for the seventh consecutive day, indicating market uncertainty. “Analyzing the last four candles, prices consolidated within the 21,400-21,850 range. The next significant trend will only become apparent with a breakout on either side of this zone. A breach below 21,400 could lead prices towards recent lows of 21,100, potentially triggering further decline. Conversely, surpassing 21,850 may propel Nifty towards the 22,000-22,100 range,” Chavan said.

His advice to traders is to remain prudent and focus on the intra-day trend to take a trade or wait for a breakthrough from the mentioned range before making bold moves.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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