Strong gains in market heavyweights Reliance Industries and HDFC Bank powered Indian stocks to another record high today. The Nifty rose 0.54% to 14,563 and the benchmark Sensex rose 0.5% to 49,517. Reliance Industries gained 3.2% and HDFC Bank 2% as investors looked past a central bank report that warned of rising bad loans among the country’s lenders.
The Nifty bank index, which fell nearly 1% in the morning session, ended up 1.1%, while the Nifty public sector bank index hit a more than 10-month high, surging 6%.
On Monday, the RBI in a report that the gross non-performing assets of Indian banks might increase from 7.5% in September 2020 to 14.8% under a severe stress scenario.
“Today, financial stocks, especially PSU banks, showed strong support in the market to move above the critical psychological barrier point of 14500. The Bank-Nifty is 215 points away from reaching an all-time high of 32613.10. The Nifty 50/Sensex index has closed above the peak point of the indecisive candlestick formation, suggesting further upside,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
“Sectoral rotational activity clearly shows that the broader market trend is still very strong. In the short term, the trend would remain uncertain due to concerns over rising crude and dollar index prices, but traders should try to find buying opportunities in the market until a negative reversal appears on the daily chart. The bullish reversal formation of Reliance Industries would help the Sensex to reach the milestone of 50,000 in the near term,” he added.
Elsewhere in the market, shares of Gail (India) Ltd 4% after the state-owned gas distribution firm said it would consider a proposal to buy back shares. Tata Motors rose 7.7%, buoyed by a double-digit increase in China sales of its luxury car unit Jaguar Land Rover (JLR).
Here is what analysts said on today’s market performance:
Deepak Jasani, Head of Retail Research, HDFC Securities
“Volumes on the NSE were the highest since Nov 27. Nifty has risen for the third consecutive day with a better breadth. Action is now shifting to largecaps and large midcaps while the balance stocks are undergoing profit taking. Large volumes on a positive day is good for our markets and yet there is no immediate trigger for reversal.”
Vinod Nair, Head of Research at Geojit Financial services
“The pace of the market rally continued despite RBI’s caution over elevated NPA levels in 2021, supported by PSU Banks and Auto stocks. Majority of the sectors traded in the green in anticipation of good quarterly result while pharma and FMCG experienced some selling. US bond yield has changed its trajectory to a rising trend, which could impact EMs in the future. But FII inflows are strong and the dollar continues to be weak due to oversupply of USD led by the high amount of fiscal stimulus.”
Rohit Singre, Senior Technical Analyst at LKP Securities.
“Going ahead 14500 will act as fantastic support in nifty and holding above said levels we may see some more decisive move in nifty towards 14600-14700 zone. The nifty bank has witnessed a bullish flag breakout on the two-hour chart which suggest Nifty Bank can outperform and see next move towards 32500-32700 zone.” (With Agency Inputs)