Indian markets hit their record high levels for the second straight session on Friday following gains in global peers on the back of upbeat macro data from the US. Back home, the positive sentiment was driven by IT, PSU Bank, and auto sectors. A rise in index heavyweights Infosys, Reliance Industries and HDFC twins also added to the rally.
"The momentum in the market has picked up again and the undercurrent has the potential to take the benchmark indices to new highs. The global support to the bullishness is coming from the mother market US where the market is resilient supported by better-than-expected Q1 GDP growth of 2 percent and declining weekly jobless claims. This resilience of the US economy, which was not anticipated and discounted by the market, is the strongest pillar of support for the global markets now. In July the market trend will be influenced by auto sales numbers in June, Q1 results, progress of the monsoon and the Fed rate decision and commentary by month end," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Both Sensex and Nifty crossed their psychological mark of 64,000 and 19,000 in Wednesday's (June 28) deals. Meanwhile, markets were closed on Thursday, June 29, on account of Bakrid.
Broader markets were also almost in line with the benchmark indices with the Nifty Midcap up 0.6 percent and Nifty Smallcap up 0.3 percent.
In Sensex, only 3 constituents were in the red - ICICI Bank, Bharti Airtel and Tata Steel, down up to 0.4 percent whereas PowerGrid, Infosys, M&M, Asian Paints and IndusInd Bank were the top gainers, up between 1.5 percent to 2.5 percent.
Meanwhile, in Nifty, 12 stocks were in the red in morning deals. Adani Ports and HDFC Life shed the most, over 1 percent each, while Eicher Motors, Tata Steel, and Apollo Hospitals fell around half a percent each.
On the other hand, Powergrid, Bajaj Auto, Infosys, M&M, and Bajaj Finance were the top 5 Nifty gainers, rising between 1.6 percent to 2.2 percent.
Among sectors, Nifty IT was the top performer, gaining 1.4 percent followed by Nifty PSU Bank, up 1.3 percent. Meanwhile, Nifty Auto also advanced almost 1 percent. Nifty Bank, Nifty Fin Services, and Nifty Pharma also added 0.6 percent each. However, Nifty Metal was the only index in the red, down 0.3 percent.
Going ahead, while experts see this record-high trend continuing, they still expect volatility in the near future. Further, the US Fed rate hike decision and June quarter earnings next month will be the key things to look out for now.
“With the breakout, the support for the index now shifted higher. For Nifty 18,800 and 18,650 are two levels that can act as a support for the index. Investors should employ a buy-on-dips approach and look out for fundamentally strong stocks. The Q1-FY24 results that will kick start from the next month are likely to provide more triggers to further fuel this rally. Sectors to watch out, for now, are IT and Banks. IT sector is under-owned and has yet to participate in the rally. Banks, on the other hand, has the highest weightage in the index and will probably do the heavy lifting from here," said Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities.