After multiple attempts this month, the benchmark index Nifty finally hit its record high, crossing the 19,000 level in today, June 28, 2023. The index surged almost 194 points in intra-day deals to hit a new high of 19,011.25.
Meanwhile, Sensex also continued its trend of hitting record highs in today's trade, breaching the 64,000 level. The index has already hit multiple highs since last week. It also jumped almost a percent or 621 points to its new high of 64,037.10.
Nifty trend
The Nifty has surged nearly 19 percent in the last 1 year and 5 percent in 2023 YTD. It has added 2.5 percent in June so far, extending gains for the fourth straight month. The index advanced 2.6 percent and 4 percent in May and April, respectively. Meanwhile, in March, it was flat but still in the green, up 0.3 percent. However, the index shed 2 and 2.5 percent, respectively in Feb and Jan 2023.
Before today, the index hit its record high of 18,887 in December 2022.
Constituents
In 2023 YTD, over 75 percent (38 stocks) of the Nifty50 constituents have given positive returns while the remaining have been in the red.
Four stocks that contributed the most to Nifty hitting its peak this year include Tata Motors (51 percent), ITC (35 percent), Bajaj Auto (28 percent) and Dr. Reddy's Labs (20 percent).
Apart from these, UltraTech Cement, PowerGrid, HDFC Life, Titan, L&T, Nestle, Britannia, Apollo Hospitals, NTPC, Maruti Suzuki, HCL Tech, M&M, Tata Consumer, BPCL, Eicher Motors, and Tech Mahindra also advanced between 10 and 20 percent each.
However, Adani Enterprises was the biggest dragger, down over 38 percent this year followed by Infosys and Hindalco, which fell over 10 percent each. Coal India, Reliance Industries, Tata Steel, TCS, Bajaj Finserv, Wipro, UPL, Cipla, SBI, and Adani Ports were also in the red in 2023 YTD.
Outlook Ahead
Going ahead, while some volatility is expected this year, the overall market sentiment seems to be positive. Here's what experts expect:
Rupak De, Senior Technical Analyst at LKP Securities
The Nifty index has achieved a new all-time high, driven by a renewed sense of optimism. This rally was backed by a consolidation breakout observed on the daily chart, indicating a strong upward movement. Additionally, the Nifty index has successfully invalidated a dark cloud cover pattern on the weekly chart. It's worth noting that failed patterns often result in more significant price movements than the initial pattern itself.
In the short term, the overall trend for the Nifty index is expected to remain positive as long as it stays above the support level of 18,700. This level is significant because put writers, who provide downside protection, are actively positioned there to prevent a substantial decline in the index.
The immediate resistance for the Nifty index is identified at 19,000. If the Nifty convincingly breaks above this level, it may induce an upward movement toward 19,450.
Siddhartha Khemka, Head of Retail Research, Broking and Distribution, MOFSL
After making several attempts in the past few days, Nifty finally managed to cross its previous highs. Strong institutional flows, healthy macros and robust earnings growth drove the domestic markets toward its new highs. Even the current valuations are reasonable at 19x one-year forward PE which at the previous peak had touched a high of 24x. With the monsoon kicking in and RBI taking a rate pause, the strong momentum in earnings is likely to continue. Thus at current valuations, the market is expected to continue its up move and remain buoyant.
Dhiraj Relli, MD & CEO, HDFC Securities
Nifty made a new all-time high on June 28, triggered by buying from institutions and retail/HNI segments. Improving US economic data and hints from China about fresh stimulus measures have helped improve sentiments. Upside momentum could take the Nifty even higher from here and if the El Nino fears subside, we may see a more sustainable up move. India shines as an attractive destination for investors from across the globe offering steady growth, falling inflation, better external trade/services situation, improving corporate earnings trajectory, prudent growth enhancement and fiscal policies.
Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services
Fundamental view: Overall Indian markets (Nifty) have remained flat (week on week) barring today’s uptick which resulted in Nifty making new highs. Bank Nifty has under-performed during this period and is poised to lead the rally into July on the back of the HDFC merger. The US markets continued the positive data with consumer confidence climbing to the highest levels since January 2022, new home sales jumped 12.2 percent to the highest levels since February 2022, and lastly home prices were up 0.9 percent in April for the top 20 cities in the US.
The above data increasing makes a case that while there might be another rate hike, but increasingly the odds of recession are reducing making way for a soft landing. This is reflected in the market buoyancy, which eases concerns about the EMs. Crude prices have remained stable to weak despite the Russian coup attempt; weaker crude prices are largely driven by poor China macro as compared to global health being questioned.
Technical setup: In our view, the market bias will remain on the upside only if 18,450 is broken should there be a trend reversal in the market.
