Sensex Hits 76,000
In another significant day on Dalal Street, the Sensex breached the 76,000-point mark for the first time on Monday, marking fresh highs for the benchmark indices in their third consecutive session. However, towards the end of the trading day, the indices relinquished their gains due to profit booking, as volatility surged ahead of the Lok Sabha election vote count on June 4. This marked the second consecutive session where the benchmark indices failed to sustain their gains after reaching new lifetime highs.
On Monday, the Sensex peaked at 76,009.68 points during intraday trading, while the Nifty 50 also achieved a record high of 23,110.80 points, surpassing the 23,100-point mark for the first time. The Sensex closed unchanged from the previous session at 75,390.50 points, while the Nifty dipped by 0.1% to 22,932.45 points.
“The Sensex reaching 76,000 and our market cap surpassing US$5 trillion is a testament to India’s growth story. Our robust macroeconomic landscape, coupled with strong corporate balance sheets, stable earnings, and substantial inflows, have contributed to these gains,” stated Shreyash Devalkar, head of equity at Axis Mutual Fund.
However, Devalkar cautioned that valuations remain elevated compared to historical levels in most segments of the market, potentially leading to moderate returns in the near term.
Despite sporadic buying last week, Foreign Institutional Investors remained net sellers, while domestic institutional investors continued to inject funds into the market. According to provisional data, FIIs sold shares worth Rs 541.22 crores, while DIIs bought shares worth Rs 922.60 crores on Monday.
Deepak Jasani, head of retail research at HDFC Securities, noted that although the market is hitting new highs incrementally, it struggles to maintain these gains due to uncertainty surrounding the June 4 event.
This uncertainty is reflected in the volatility gauge, India VIX, which surged nearly 7% to 23.19, as six of the seven phases of voting were completed. Experts anticipate that the market will likely continue consolidating with a positive bias until the election outcome becomes clear.
“The presence of resistance around the 23,100 level in the Nifty, combined with the rise in the volatility index, India VIX, capped the upside. Further consolidation in the index is expected ahead, prompting participants to focus on careful stock selection and effective trade management,” explained Ajit Mishra, senior vice president of research at Religare Broking.
The market’s positive momentum has been driven by restrained selling by FIIs and robust gains in banking stocks. The Nifty Bank index rose by 0.6% today, outperforming the benchmark indices for the third consecutive session. HDFC Bank, Axis Bank, and State Bank of India were among the top contributors to the gains in the benchmark indices on Thursday.
However, Adani Enterprises and Wipro experienced declines following the announcement of BSE’s semi-annual rejig after Friday’s market close. Wipro fell by over 2% as it is set to be replaced by Adani Ports and Special Economic Zone in the Sensex. Adani Enterprises dropped nearly 3% due to profit booking, following last week’s surge in anticipation of its inclusion in the Sensex.
