Sensex At Record High: The S&P BSE Sensex hit its fresh all-time high of 63,588 level in the intra-day trade on Wednesday. This comes ahead of US Federal Reserve Chair Jerome Powell’s congressional testimony led by gains in index heavyweights Reliance, TCS and HDFC twins.
Sensex hit a record high of 63,588 as it rose 260 points or 0.41 per cent. The previous peak was 63,583, which it scaled on December 1, 2022.
The NSE Nifty hit a high of 18,875.90 on Wednesday, around 10 points away from its record intraday high of 18,887.60 points reached on December 1, 2022. The Sensex had touched 63,284.19 points the same day.
The rally in the Indian equity markets started after March 28 and both the benchmark indices gained nearly 10 per cent since then. Foreign investors have bought equities worth around $8.28 billion in this period.
Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “”Sensex Surges to a New Record High, Breaking a Six-Month Wait for Investors. While the headline indices Nifty and Sensex are displaying gradual upward movement, the true growth potential lies within the broader market.”
“The sustained flow of better-than-expected domestic macroeconomic data kept the market mood afloat, with the Nifty Midcap trading at all-time highs. The domestic CPI data moderated closer to the RBI’s target due to the tone-down in food inflation and a favourable base, which increased the likelihood of a rate cut by the end of the year,” said Vinod Nair, Head of Research at Geojit Financial Services.
Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS, said: “The Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. We continue to believe in the long-term growth story of the Indian equity market, supported by the emerging favourable structure, as increasing Capex enables banks to improve credit growth. Our base case Dec’23 Nifty target is at 20,200 by valuing it at 20x on Dec’24 earnings.”
What’s Next For Investors?
Meena said: “This broader market outperformance is expected to persist as we approach the peak interest rate scenarios. Although some profit booking is anticipated around the 64000 level, any temporary decline presents an excellent buying opportunity. The immediate demand zone is projected to be within the range of 61,700–62,400.”
Where Should You Invest Now?
Gaurav Dua, Head of Capital Market Strategy, Sharekhan by BNP Paribas, says that as an investor with an investment horizon of 18–24 months, “we believe that private sector banks, NBFCs, auto and auto ancillary companies, engineering and capital goods companies, and select consumer and building material companies should outperform.”
On the other hand, the expert believes that energy, metals, and IT services could turn out to be laggards in the same period.
Sharing suitable investment sectors Meena said: “We continue to be bullish on Capital goods, Auto, and Banking space. However, NBFC, Pharma, and Chemical sectors are also providing favorable risk- reward opportunities.”
Meanwhile, Kulkarni explained that “The macro will continue to drive the market direction, moving forward, and rural and domestic focus themes will gain momentum from here onwards. Because of normal monsoon expectations, pickup in the economic activities, sequential improvement in the services PMI, and the likelihood of higher remittances will likely translate into rural recovery in the upcoming months. With robust GDP data, the market positioning is expected to shift toward domestic-oriented themes comprising BFSI, Automobiles, Industrials and consumption play. Adding to all, the upcoming Monsoon will play a key role in rural and broad-based recovery.”
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