The Sensex on Tuesday opened 142 points lower but within minutes, it claimed the green territory and jumped 134.5 points to its all-time high of 62,639.30 in the early morning trade. The Nifty also opened slightly lower by 10 points but later saw buying and jumped 64.65 points to scale its lifetime high of 18,627.40. This is the fourth consecutive day for the equity markets to hit record high levels and sixth day in a row to post gains.
The rupee also strengthened on Tuesday by 8 paise to 81.60 to a dollar in the early morning trade, compared with the previous close of 81.68.
Among the 30-shares on the Sensex, 20 shares were in the green while 10 were in the red. Hindustan Unilever, Dr Reddy, Tata Steel, Titan and Sun Pharma were the top performers in the early trade. On the other hand, Maruti, Bajaj Finserv, Asian Paints and L&T were the top laggards.
The broader markets also opened in green. The BSE MidCap rose 0.14 per cent and the SmallCap index gained 0.4 per cent. Among sectors, Nifty FMCG, metals, IT and pharma indices held stable gains, while Auto index was the sole loser, down 0.3 per cent.
V K Vijayakumar, chief investment strategist at Geojit Financial Services, said, “Nifty rising to a new record of 18,614 is indicative of the underlying bullishness in the market. But the global market construct is not very favourable for the rally to continue unabated. Also, the high valuation in India is becoming a matter of concern. The troubles in China are a matter of concern but it is too early to judge its impact on the global economy. This is an issue that has to be watched closely. Meanwhile, domestic economic cues continue to be positive.”
He added that the September quarter credit growth has risen to an impressive 17.2 per cent and the employment by listed companies has crossed the 10m mark in 2021-22. Banking stocks can remain resilient in spite of record levels. Comments and indications on the trajectory of US interest rates are more likely to impact global equity markets more than anything else.
The Sensex had on Monday surged over 211.16 points to close at its all-time high of 62,504.80, helped by heavy buying in stocks such as Reliance Industries, Nestle India, Asian Paints. The NSE Nifty also rallied almost 50 points to close above the 18,500 level at 18,562.75, its lifetime high too. Elsewhere in Asia, markets in Seoul, Tokyo, Shanghai and Hong Kong had ended lower.
Prashanth Tapse, research analyst and senior vice-president (research) of Mehta Equities, said, “Local benchmark indices are likely to struggle in early Tuesday trades, as protests in China against the country’s strict zero-COVID curbs have unsettled investors leading to a sharp sell-off in overnight US markets. The rising protest is fueling concerns about global economic growth as supply chain concerns mount amidst protests in China.”
Tapse added that the worries about China’s COVID-19 policies are overshadowing the support from the Chinese central bank’s 25 basis point cut to the reserve requirement ratio announced last week. The Chinese unrest, however, may just be an excuse for investors to book profits following Nifty’s impressive rally to its new-all-time high at 18614 mark. Technically, Nifty’s make-or-break support is seen only at the 18257 mark.
The Rupee Strengthens 8 Paise
The rupee also strengthened on Tuesday by 8 paise to 81.60 to a dollar in the early morning trade, compared with the previous close of 81.68. Besides, a weak American currency in the overseas market helped the local unit, forex dealers said.
At the interbank foreign exchange, the domestic unit opened strong at 81.58 against the dollar, then inched lower to quote at 81.60, registering a rise of 8 paise over its previous close.
In the previous session on Monday, the rupee rose 3 paise to end at 81.68 against the dollar. The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.38 per cent to 106.28.
Brent crude futures, the global oil benchmark, surged 1.39 per cent to USD 84.35 per barrel. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they sold shares worth Rs 935.88 crore, according to exchange data.
Rahul Kalantri, vice-president (commodities) of Mehta Equities, said, “The dollar-rupee’s 28 December futures contract was unable to sustain above 81.85 and slipped again. On the daily technical chart, the pair is trading below its support level of 81.85. While RSI is fetching below 50 levels, MACD is showing positive divergence on the daily technical chart. Looking at the technical set-up, MACD is showing positive divergence but the pair is facing steep resistance at higher levels.”
He added that if the pair only sustains above 81.85 levels it could witness further strength towards 82.20-82.45, else could test its support level of 81.45-81.30 again. We expect the pair to trade in the range of 81.30-82.20; either side breakout of the range could give further directions.
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