NEW DELHI: Led by ‘underperforming’ private banking stocks, India’s equity market benchmarks closed in green for the 6th straight session. In a highly volatile session, the NSE Nifty50 index scaled to a fresh all-time high on Tuesday while the BSE Sensex reclaimed 73,000 level.
The 30-share pack Sensex closed higher by 349.24 points, or 0.48%, at 73,057.40 while the Nifty50 rose further by 74.70 points, or 0.34%, to close at a new record level of 22,196.95. The 50-share index touched a lifetime high of 22,215.60 during the Tuesday session.
“Amidst volatility, the domestic market is once again poised to approach record highs. The latest upward trajectory is bolstered by gains in the banking sector, with private banks witnessing a rebound from a recent sharp correction,” said Vinod Nair, Head of Research, Geojit Financial Services.
The biggest contributors to Tuesday’s rally were private lenders like HDFC Bank, Axis Bank, Kotak Bank, IndusInd Bank and ICICI Bank. These stocks, especially the heavyweight HDFC, have been under severe selling pressure since the Q3FY24 earning numbers. HDFC Bank shares surged 2.6% to Rs 1,454 apiece on Tuesday after several brokerages reiterated “buy” rating, citing a likely rebound in earnings growth.
Brokerage firm Citi kept its ‘buy’ call on HDFC Bank with a target price of Rs 2,050 per share, indicating an upside of more than 40% from the current level. Morgan Stanley has also retained its ‘overweight’ rating on the stock with a target price of Rs 2,110 apiece. Meanwhile, in the broader market, Nifty Midcap100 and Nifty Smallcap fell 0.13% and 0.53%, respectively.
“The decline in mid & small caps suggests investors are continuing to exercise caution due to higher valuations. The forthcoming release of the US Fed minutes this week holds significance, maily in light of recent sticky inflation data, which raises uncertainty regarding the timing of the Federal Reserve’s initiation of its easing cycle,” said Nair.