Sensex zooms 593 points to hit fresh closing high; Nifty settles above 16,500: Top reasons behind the surge

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Top gainers in the sensex pack included TCS, L&T, Bharti Airtel, HCL Tech, Tata Steel, Bajaj Auto and Reliance. (Representative image)

NEW DELHI: Equity indices jumped to record highs yet again on Friday with the benchmark BSE sensex rising over 593 points led by gains in IT and financial stocks.
After scaling an intra-day high of 55,488, the 30-share BSE index finished 593 points or 1.08 per cent at fresh peak of 55,437; while the broader NSE Nifty settled 165 points or 1.01 per cent at new record high of 16,529.
Top gainers in the sensex pack included TCS, L&T, Bharti Airtel, HCL Tech, Tata Steel, Bajaj Auto and Reliance with their shares rising as much as 3.22 per cent.
Whereas, PowerGrid, Dr Reddy’s, IndusInd Bank, Bajaj Finance and NTPC were the major losers falling up to 1.26 per cent.
On the NSE platform, sub-indices Nifty IT, Financial Services, Banking and Metal gained up to 1.35 per cent.
Here are top reasons behind the surge:
* IT stocks
Information Technology (IT) stocks led gains among the Nifty’s sectoral indexes, rising 1.43 per cent.
“Bulls are showing no signs of fatigue as Nifty raced to another record… Global support to the rally is intact with the Dow and S&P setting yet another record high,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services told news agency PTI.
Retail investors relentlessly chasing stocks and the sheer momentum in the market has taken the Nifty to 16,500 levels, he said, adding that the rally is likely to be led by the leading high-quality private banks and leading IT names.
* Banking, financial stocks
Banking, financial stocks boomed after finance minister Nirmala Sitharaman assured industrialists of continued liquidity support.
Speaking at the Confederation of Indian Industry’s (CII) annual meeting on Thursday, Sitharaman said that the economy had not so far reached a level where the central bank can begin pulling back liquidity.
“The finance minister said there would be timely disbursement of taxes to the state governments. If that money gets utilised on capital investment, that can work great for the markets,” Saurabh Jain, assistant vice president at SMC Securities told news agency Reuters.
* Improved macroeconomic data
According to experts, market surge is also driven by positive macroeconomic data.
Retail inflation eased to 5.59 per cent in July from 6.26 per cent in June amid ease in prices of food products.
While, industrial production surged by 13.6 per cent in June mainly due to a low-base effect and good performance by manufacturing, mining and power sectors.
“Domestic sentiment remains positive as the industrial output data has shown signs of recovery in the manufacturing sector adding to more buying in the market,” Likhita Chepa of CapitalVia Global Research told news agency IANS.
“Retail inflation has also started to decrease which is another positive sign for the market. Our research suggests that if the market sustain above the zone of 16,350-16,370, we can expect the market to achieve the new level of 16,480-16,500,” she added.
* China factor
Regulatory crackdowns in China have led to foreign investors redirecting money into equities in India and other emerging markets, analysts have noted.
Foreign investors have bought $243.28 million in Indian equities so far this month, according to Refinitiv Eikon data.
(With inputs from agencies)

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