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Journalism of Courage
Sensex on Monday hit a fresh life-time high for the third straight session as investors and funds continued their buying spree amid better-than-expected macro data and corporate earnings. The benchmark BSE Sensex rose by 251.12 points to end at a new peak of 34,843.51. The broader Nifty gained 60.30 points to finish at fresh record high of 10,741.55. The rupee gained 14 paise and closed at 63.49/50 per dollar as against 63.63 on Friday.
According to dealers, the domestic sentiment was upbeat on positive macro data which was announced after trading hours on Friday and encouraging earnings posted by some bluechip companies coupled with a firming trend in other Asian bourses. The industrial production (IIP) growth soaring to a 17-month high of 8.4 per cent in November despite retail inflation spiking to 5.21 per cent in December bolstered the market sentiment. Meanwhile, WPI inflation fell to a three-month low of 3.58 per cent in December which assuaged price rise worries.
Jayant Manglik, president, Religare Broking, “markets traded jubilant and ended with decent gains in continuation to the uptrend. The sentiment was boosted on upbeat IIP data and supportive global cues. It opened up and gradually moved higher to a newer record high, ignoring rise in CPI inflation. Banking and financial counters were in the limelight along with select stocks from media. Finally, the banking pack is out of the congestion zone and we believe this momentum will extend further.” The Sensex has now gained around 750 points in the last two weeks.
“A series of positive factors such as strong liquidity on unabated pumping of funds by DIIs and positive cues from global markets, drove markets to new highs,” said a dealer. The Sensex resumed higher at 34,687.21 and advanced close to the 35,000 level to touch a new all-time intra-day high of 34,963.69, surpassing its previous record of 34,638.42, clocked in Friday’s trade.
Profit booking at record levels erased some of the gains at fag-end and the index settled at record close of 34,843.51. Anand Radhakrishnan, CIO, Franklin Equity, said, “the Q3 corporate results are likely to improve not just on account of base effect but also due to pick up in economic activities compared to the first half of FY18. An increase in demand aided by fading impact of demonetization and GST as well as good monsoon should augur well for growth in corporate earnings.
A meaningful growth in Q3 and Q4 earnings should provide fundamental strength to the current market rally. This is crucial for supporting investor sentiments given a single digit growth in corporate earnings in past few years and the recent state elections raising doubts regarding re-election of ruling party in 2019 general elections.”
On Monday, the financial sector surged the most by gaining 1.53 per cent, followed by bankex 1.25 per cent, consumer durables 1.13 per cent, power 0.29 per cent, metal 0.22 per cent and realty 0.10 per cent. HDFC emerged as the best performer by climbing 6.17 per cent to its 52-week high after the company said it plans to raise up to Rs 13,000 crore via a QIP issue. Infosys ended higher by 0.19 per cent after it maintained its FY2017-18 sales growth outlook. Among banking stocks, ICICI Bank, HDFC Bank, Kotak Bank and Axis Bank rose up to 3.73 per cent.
Shares of Capital First closed up 1.40 per cent while IDFC Bank ended the day down 5 per cent on the bourses following their announcement of merger. IDFC Bank and non-banking financial company Capital First on January 13 said they have received approval from their respective boards for a merger.
Furthermore, most Asian markets ended in the green and European markets were flat in early deals, following a weekend record closing on Wall Street on the back of optimism about corporate earnings.
Japan’s Nikkei rose 0.26 per cent, while Sydney advanced 0.1 per cent, Seoul and Singapore were each up 0.3 per cent. Hong Kong’s Hang Seng however shed 0.23 per cent to end its record rally in new year but investors were optimistic over the index breaching its 2007 life-time high.
