The Sensex on Wednesday closed above the 50000-mark for the first time as the buoyant post-budget mood continued for the third straight session amid strong inflows from foreign portfolio investors (FPIs).
Market experts are now of the view that though the sentiment remains positive, once the impact of the budget is fully absorbed by stocks, the focus will shift to other factors such as corporate earnings, rollout of the vaccine and global developments.
For the immediate term, the next key event is the Reserve Bank of India’s (RBI) monetary policy that will be announced on Friday.
The investing community have given a thumbs-up to the growth-oriented proposals of the budget even as they were relieved a Covid cess was not imposed. Investor wealth has jumped over Rs 12.31 lakh crore in three days, taking the market capitalisation of all BSE-listed companies to over Rs 198.43 lakh crore.
In Wednesday’s trading, the 30-share index opened at 50231.06 and touched a record intra-day high of 50526.39 — a gain of 728.67 points and thereafter closed at 50255.75, up 458.03 points or 0.92 per cent.
Similarly, the broader NSE Nifty surged 142.10 points, or 0.97 per cent, to its fresh closing record of 14789.95. It touched an all-time high of 14868.85 during the day. Positive global cues also helped the stocks remain in the green even as provisional data showed foreign investors buying equities of over Rs 2,500 crore in Wednesday’s trade.
IndusInd Bank led the gainers list on the Sensex, rising 7.65 per cent, followed by PowerGrid, Dr Reddy's, Sun Pharma, NTPC and Axis Bank. However, UltraTech Cement, Maruti, ITC, Kotak Bank, Asian Paints, Nestle India and TCS were among the losers, slipping up to 0.90 per cent.
“Global cues were positive led by progress towards US stimulus and rollout of vaccines in many countries. On the domestic side, Sensex closed above the 50000-mark for the first time led by a growth-oriented bold budget, massive FII buying, and global cues.
Even the services PMI data was encouraging, which boosted sentiments. The earnings season is showing tangible momentum and is witnessing upgrades for the second consecutive quarter. Going ahead, we believe once the fineprint of the budget is absorbed, the market focus would return to the fundamentals — corporate earnings growth,’’ Siddhartha Khemka, head - retail research, Motilal Oswal Financial Services, said.
Khemka added that the earnings drivers are shifting to cyclical, with corporate banks, cement, and metals driving growth.
