Sensex, after scaling an intra-day high at 73,402 points, closed just a tad off at Rs 73,328, up 759 points.On the NSE, nifty, too, followed a similar trajectory and recorded its all-time high at 22,116 points and closed at 22,097, up 203 points.
Experts cautious after sharp jump in indices
The sensex and Nifty on Monday recorded new peaks on the back of strong buying in HDFC Bank, Reliance Industries and Infosys even as experts sounded a cautious note.
Benchmark sensex has taken 13 sessions to cross 73,000 for the first time after hitting the 72K mark on December 27. On its part, broader Nifty has taken 25 sessions to move from the 21K to the 22K mark, making it the third fastest 1,000-point rally for the index.
On the sectoral front, it was the software pack that led the gainers, with BSE’s IT index closing 1.8% higher compared to a 1.1% gain in the sensex. Better-than-expected retail inflation data released last week also helped the rally, market players said. Foreign funds led the day’s rally with a net buying figure of Rs 1,086 crore while domestic institutions were net sellers at Rs 821 crore, BSE data showed.
According to Siddhartha Khemka of Motilal Oswal Financial Services, domestic equities surged to fresh highs due to rally in IT stocks and favourable inflation data. IT stocks continued their northbound movement and rallied 6.5% in the last two trading sessions amid better-than-expected third-quarter results by heavyweights and underperformance in the past, Khemka said in a note.
The Q3 earning season had a positive start and is further expected to be propelled by the banking & financials segment, from which several of the heavyweights are set to announce their quarterly results this week. “This will support the ongoing market momentum and stock-specific action,” Khemka said.
During the day’s trade, HDFC Bank, RIL and Infosys contributed more than two-third of the sensex’s 759-point gain, BSE data showed. Of the 30 index constituents, 21 closed higher. On the other hand, selling in Bajaj Finance and L&T limited the gains in the index.
The recent sharp rise in the market is also prompting top brokers to advise investors to be cautious. “(The) recent upswing warrants a certain degree of caution as, many times, such sharp rallies do not sustain,” said Pranav Haridasan, MD & CEO, Axis Securities. “We believe that the near-term view will be cautious and suggest profit booking in areas of exuberance, especially in the small-cap space.”
