The record-breaking winning streak in domestic markets extended to a 13th day on Monday, with growing optimism over rate cuts in the US keeping sentiment buoyant. The benchmark Nifty 50 index closed with gains for the 13th consecutive day, gaining nearly 5 per cent during this period. The index has never gained more than 11 sessions in the past.
After hitting a high of 25,334, the 50-share blue chip index closed at 25,279, up 43 points or 0.2 per cent. The Sensex ended the session at 82,560, up 194 points or 0.2 per cent. Both the indices hit fresh intra-day and post-close highs, with consumer and software stocks leading the way. The combined market capitalisation of BSE-listed companies rose by Rs 45,000 crore to stand at Rs 464.9 trillion.
Infosys and ITC boosted gains. Hopes of a recovery in rural demand after a good monsoon helped ITC’s earnings. IT stocks, including Infosys, rose as they earn a large chunk of their revenue from the US. However, some analysts warned that optimism in IT stocks is irrational.
“IT stock earnings are now driven by momentum. Over the last two years, revenue growth in dollar terms has been in single digits,” said Chokkalingam G, founder of Equinomics.
Foreign investors bought shares worth Rs 1,735 crore, while domestic institutions also purchased shares worth Rs 356 crore.
Traders are pricing in the start of the U.S. interest rate cycle in September, with some betting on a 50-basis-point cut, according to data compiled by Bloomberg. However, some experts say the rally in stocks would run out of steam even if the Federal Reserve cut rates. Analysts at JP Morgan Chase and Co said any interest rate cut would be in response to slowing growth.
Analysts said the U.S. economy is not out of the woods yet and geopolitical and political uncertainty is high. In addition, September has historically been a bad month for U.S. stocks. The failure of the Chinese economy to recover despite multiple rounds of stimulus is also weighing on investors’ minds.
In addition to the US elections, initial jobless claims, non-farm payrolls data and other macroeconomic data from around the world will determine the path of the market.
“The Indian market continues to hold its ground and maintains the new high with marginal positivity. The positive trend remains broadly as domestic economic growth remains healthy and PMI numbers are well above the long-term average, indicating a pickup in earnings in the coming quarters. However, volatility has picked up as first-quarter GDP growth has moderated, with a similar trend seen in corporate earnings. Also, Indian PMI readings for August were marginally lower than July, indicating that caution is in the air,” said Vinod Nair, Head of Research, Geojit Financial Services.
Market breadth was negative with 2,262 stocks declining and 1,776 advancing. Two-thirds of the Sensex stocks rose. Nifty Small 100 and Nifty Midcap 100 indices closed lower. Bajaj Finserv and Bajaj Finance were the best performing Nifty stocks.
First published: September 2, 2024 | 18:32 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.