NEW DELHI: Bull-run continues in the domestic equity market as benchmark indices the Sensex and the Nifty50 closed higher for the fifth consecutive session on Thursday.
This five-day rally comes despite muted global cues, the US dollar getting stronger and a rise in crude oil prices. On Thursday, Sensex closed 0.58% higher at 66,265.56 while the broader Nifty50 settled 0.49% higher at 19,707. In the past five sessions, Sensex has gained 2% while Nifty has surged 2.25%.
“After a volatile start, markets rebounded sharply to maintain its upward bias for the fifth consecutive session, even as foreign inflows continued to be patchy amid falling rupee and global economic uncertainty. The market remained bullish despite weakness across the Asian and US markets, as investors remained upbeat about India’s long-term growth prospects,” said Shrikant Chouhan, head of research (Retail), at Kotak Securities.
Asian markets, such as Japan’s Nikkei and China’s Shanghai Composite fell up to 1% each. The US dollar on Thursday was trading near a multi-month high level against many other currencies and international oil hovered around the $90 per barrel mark.
Deepak Jasani, head of Retail Research, at HDFC Securities, said global equities mostly fell on Thursday as new signs of sustained inflationary pressures in the United States and rising energy prices globally boosted the case for higher-for-longer interest rates.
The gain in the equity market is also attributed to a strong economic outlook and stock-specific select buying. Meanwhile, India’s Small-cap and mid-cap stocks continue to see strong buying and from the lows of late March 2023, the Nifty Smallcap 100 index has surged about 40% while the Nifty Midcap 100 has risen by 36%. In the same period, the Nifty50 has delivered a relatively modest return of 16%.
This sharp rally in mid-cap and small-cap stocks has become a matter of concern as some analysts have passed a cautious note to investors. Ajit Mishra, SVP of Technical Research at Religare Broking, said there are overbought indications in the midcap space.
Vinod Nair, Head of Research at Geojit Financial Services, while being bullish at Mid & Smallcaps, noted that there has been strong performance in the short term by Mid & Smallcaps but sustaining this in the near term may pose a challenge. On Thursday, the top five gainers on the Nifty50 were Coal India, L&T, IndusInd Bank, SBI Life and Tech Mahindra. Coal India, PSU stocks, hit a fresh 52-week high today and have gained over 17% in five trading sessions.