Sensex ends 1st time above 62k on hopes of Fed pivot
The sensex hit its all-time intraday high of 62,412 before ending at 62,273, gaining 762 points (1. 2%) over Wednesday’s close. This is the first time the sensex has closed above the 62k mark. The last all-time intraday sensex high of 62,245 was recorded on October 19, 2021. The Nifty also hit a 52-week high of 18,529 and ended at a fresh record level of 18,484. Bank Nifty index continued to set fresh highs and closed above 43k for the first time.
The stock market rally, which was part of a global surge, followed the release of the minutes of the US Fed’s meetings on Wednesday, which showed support for slower rate increases. Indian markets were also buoyed by news that Europe was considering a higherthan-expected price cap on Russian crude. In the forex market, the rupee gained 22 paise to close at 81. 63 against the dollar, which weakened against major currencies.
Among sectoral indices, IT jumped 2. 3%, oil & gas (1. 3%), financial services (1%) and FMCG (0. 9%). While the rallyin IT stocks was attributed to value purchases and the surge in the Nasdaq, stocks of public sector banks continued to rise as they were expected to report higher profits on the back of record loan growth and a clean-up of their balance sheets.
“We expect the positive momentum in Indian markets to continue, buoyed by global cues, fall in crude oil prices to 10-month low and 9th consecutive weekly decline in India VIX (volatility index) to a 52-week low. Once Nifty is able to cross its previous high of 18,604, we expect it to gradually inch up towards 19k levels over the next few weeks,” said Siddhartha Khemka of Motilal Oswal Financial Services.
The high valuations indicate that the market expects companies to report even better performance in coming quarters. “With most broad equity indices being close to their all-time highs, they are pricing in the best, which is yet to reflect in near-term estimates. While current valuations will put an upside cap on prices owing to the minimal possibility of rerating, strengths in earnings is expected to keep the downside protected,” said Elara Capital in a report on Thursday.