The domestic equity market witnessed healthy across-the-board buying interest on November 24, lifting the benchmarks the Sensex and the Nifty to new highs.
Investors jumped on short covering on the last day of the November futures and options (F&O) series as risk appetite improved on hopes of a pause in rate hikes by the Fed. Besides, a fall in the US dollar and crude oil prices also supported sentiment.
World shares touched a two-month high and the dollar swooped towards a three-month low on Thursday, after Federal Reserve meeting minutes pointed to a slower pace of U.S. interest rate rises from next month, reported Reuters.
While the Sensex hit its fresh all-time high of 62,412.33 in intraday trade, Nifty hit its new 52-week high of 18,529.70 in intraday trade. Nifty's all-time high is 18,604.45 which it hit on October 19, 2021.
Sensex closed 762 points, or 1.24%, higher at 62,272.68 while the Nifty ended at 18,484.10, up 217 points, or 1.19%. Both Sensex and Nifty closed at their record closing high levels.
Mid and smallcaps underperformed. The BSE Midcap index rose 0.52% and the Smallcap index inched up 0.42%.
The overall market capitalisation of BSE-listed firms rose to ₹283.7 lakh crore from ₹281.4 lakh crore in the previous session, making investors richer by ₹2.3 lakh crore in a single day.
"Investors wound up their short positions on the expiry day, triggered by US Fed minutes indicating a moderate pace of rate hikes going ahead that eventually propelled benchmark Sensex to a new all-time high," said Shrikant Chouhan, Head of Equity Research ( Retail), Kotak Securities.
"Other positive catalysts such as the WTI crude oil prices staying sluggish and the falling US Dollar index and yields improved the risk appetite of investors leading to a broad-based buying," said Chouhan.
The rupee ended 22 paise higher at 81.63 per dollar. Crude oil benchmark Brent Crude traded near the $85 per barrel mark.
In the 30-share pack Sensex, only four stocks - Tata Steel, Bajaj Finserv, Bajaj Finance and Kotak Mahindra Bank - ended in the red.
Stocks of Infosys, HCL Tech, Power Grid, Wipro, Tech Mahindra and TCS ended as the top gainers in the Sensex index. in the dollar and crude oil prices also supported the sentiment.
"Led by broad-based buying, domestic indices witnessed solid gains as investors digested the latest FOMC meeting minutes, which hinted that the rate hike cycle may be slowing down. The optimism was further boosted by falling crude prices and the declining dollar index. Crude oil prices dropped over talks of a possible price cap on Russian oil and a rise in US product stockpiles," Vinod Nair, Head of Research at Geojit Financial Services pointed out.
Among the sectoral indices, Nifty IT jumped 2.63%. IT stocks jumped on hopes of a pause in Fed hikes which will diminish the prospects of a recession in the US and boost the Indian IT services firms.
Nifty Bank hit an all-time high of 43,163.40 in intraday trade. It closed 0.81% higher at 43,075.40.
"The Bank Nifty bulls came back with full strength and knocked out the bears from the resistance zone of 42,600-42,800 on the last day of monthly expiry," Kunal Shah, Senior Technical Analyst at LKP Securities observed.
"It has witnessed a fresh breakout on the daily chart, pushing it higher towards the level of 44,000 in the near term. The lower-end support is now visible at 42,600 which will act as a cushion for the bulls," said Shah.
Banking stocks have been on roll this year thanks to improving asset quality, healthy credit growth and better-than-expected quarterly earnings.
Nifty Financial Services, Oil & Gas, Bank, PSU Bank and FMCG indices rose up to a percent.
Some 134 stocks, including Bank of Baroda, Punjab National Bank, Canara Bank, Bank of India, Easy Trip Planners and Power Finance Corporation, hit their fresh 52-week highs in intraday trade.
Technical view by experts
Chouhan underscored that on the daily charts, the Nifty has now formed a long bullish candle and is also holding higher high and higher low formation on the daily and intraday charts which is broadly positive.
"For traders, as long as the index holds the support of 18,400, there are chances it could hit 18,600-18,700 levels. On the other hand, below 18,400, the uptrend would be vulnerable," said Chouhan.
Rupak De, Senior Technical Analyst at LKP Securities observed that the daily momentum indicator RSI remains in a positive crossover.
"The trend looks positive as long as it sustains above 18,350. Going forward, 18,350 may provide immediate support. On the higher end, resistance is visible at 18,650, above which Nifty may move up further," said De.
Key markets data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.