Market at new high: Sensex crosses 64,000, Nifty hits 19,000; will the rally sustain?

Indian benchmark equity indices Sensex and Nifty hit fresh all-time high levels on Wednesday on the back of a broad-based rally across sectors and index heavyweights. The market rally was also supported by short positions covering by traders ahead of the expiry of the June derivative contract. Adding to it, sustained buying by foreign investors as well as firm cues from global peers amid optimism about further policy stimulus from China as well as strong U.S. economic data also lifted market sentiments.

The BSE Sensex crossed 64,000 marks for the first time, while NSE Nifty hit 19,000 levels, driven by sustained gain in the last three sessions. During the session so far, the 30-share Sensex gained as much as 621 points, or around 1%, to touch a new record high of 64,037, and the Nifty50 jumped 194 points, or 1%, to hit 19,011 level.

At the time of reporting, the Sensex was quoting at 63,999, up by 583 points, or 0.92%, and the Nifty was at 19,001, up by 183.85 points, or 0.98%.

The broader market also witnessed buying activities, albeit lower than benchmark indices. The midcap index was up 0.45% and the smallcap was trading higher by 0.18%.

The market breadth, indicating the overall strength of the market, was strong. On BSE, a total of 3,759 shares traded so far, with 1834 shares advancing, 1,733 shares declining, and 192 were unchanged.

Among the individual stocks, NTPC topped the gainers chart, followed by Tata Motors, Titan Company, Larsen & Toubro, Sun Pharmaceutical, among others. All the 30 Sensex constituents, barring Wipro, Tech Mahindra, HCL Technologies, and Kotak Mahindra Bank, were trading in positive terrain.

On the sectoral front, all the indices were flashing in the green zone, led by metal and consumer durable sectors, which were up over 1% each.

Will the market rally sustain?

Rupak De, Senior Technical Analyst at LKP Securities said that 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,” De said.

According to the analyst, 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 towards the 19,450,” he added.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said that the Sensex rallied to all-time-high is in tune with the global rally in stock markets. “Most markets are at 52- week highs. Last year, global markets had corrected discounting a US recession early this year and its impact on global growth and corporate earnings. But this didn’t happen and markets are compensating for this overreaction of last year. In India, a sustained rally beyond the record highs is difficult since valuations are rich. Further rally, beyond a point, will not have fundamental support.”

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)