Market indices closed higher on Tuesday, buoyed by the release of key economic data on the domestic front, amid strong Asian equities. Sensex ended 505 points higher at 44,655 and Nifty rose 140 points to 13,109. Today, BSE's market cap has reached the highest-ever peak of Rs 1,76,22,306.71 crore.
Investor risk sentiment improved after positive macro-economic data released on the domestic front. Traders said better than expected GDP and PMI data amid unabated foreign capital inflows also strengthened market sentiment.
UltraTech Cement followed by Infosys, Sun Pharma, Bajaj Auto PowerGrid, ICICI Bank and IndusInd Bank were among the top gainers in the Sensex pack. On the other hand, ONGC, M&M, Nestle India, Axis Bank and HDFC were among the laggards.
In economic data, India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped Gross Domestic Product (GDP) in the July-September period, showing economic output shrinking by 7.5%, following the 23.9% contraction in the first quarter.
Meanwhile, India's eight core industries growth for October was at -2.5%. The September growth number has been revised to -0.1% from -0.8% earlier, mainly due to a decline in production of crude oil, natural gas, refinery products and steel.
Furthermore, PMI fell to a three-month low of 56.3 in November. The seasonally adjusted IHS Marki India Manufacturing Purchasing Managers' Index (PMI) highlighted a strong improvement in business conditions. However, the headline number was down from 58.9 in October to a three-month low.
Among sectors, barring FMCG, all the other sectoral indices closed in the green, with realty and PSU bank index registering a gain of 3%, followed by a 1.8% rise in media, pharma and IT stocks.
On the global front, Asian equities were buoyed today as investors react to the release of a private survey of China's manufacturing activity which came in at 54.9. Amid buoyancy, European and US futures reversed the trend and bounced back sharply with good gains, shrugging off immediate concerns about the spiking coronavirus pandemic. Talks between UK and EU are at a significant stage which could act as triggers in the coming days.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "Q2 GDP numbers at 7.5 % contraction came much better than expectations. Impressive corporate earnings are a major contributor to these GDP numbers. If this trend continues Q3 and Q4 numbers will surprise on the upside. Q4 is likely to witness expansion in GDP. The annual GDP figure is likely to be around 8% contraction, not 10% feared earlier. FII buying for November was Rs 60300 crores, beating the previous record by around Rs 25000 crores. FII buying is likely to slow down in December due to the holiday season"
Ashis Biswas, Head of Technical Research, CapitalVia Global Research Limited- Investment Advisor said," After a few days of the lackluster movement, we witnessed a positive trend in today's market activity. The expected levels of the market are likely to be in the range of 13050 and 13220 and it's going to be crucial for the short-term market scenario to sustain above the 13050 Nifty50 index level. We have observed that momentum indicators like RSI, MACD to support the upside move and indicating potential upside from the current market level."
Gaurav Garg, Head of Research, CapitalVia Global Research Limited- Investment Advisor said," Technically, Nifty might find its immediate support in the range of 12,700-12,750 where nifty might rest. Lower IndiaVix showing bulls might continue to hold their grip over broader indices. The technical set-up is strong, and Nifty might touch 13,300 in the month of December, however, options data is showing 12,500 is immediate support that should be held for this series for further up-move."
He added," On December 4th, MPC will announce their decision on the interest rate which might affect Banking and financial stocks therefore investors should focus in this sector. The month of December might be calm, and Nifty might consolidate after a splendid November month. Auto sales data for December month might surprise streets after the festive season as we might expect a spike in auto-sales."
Ajit Mishra, VP - Research, Religare Broking said, "The up move in the index was largely in reaction to the better than expected GDP numbers and consistency in GST revenue figures. Now, all eyes would be on RBI's monetary policy meet. Considering the impending event, we reiterate our positive yet cautious approach and suggest maintaining focus on the selection of stocks."
Keshav Lahoti-Associate Equity Analyst, Angel Broking said," Indian market started the December month with a bang by closing up by 1.1% due to strong economic recovery data and positive global cues. Strong GDP numbers and expectation of faster economic recovery is leading to a rally in the market. Global cues were positive: Dow Futures, Nasdaq Futures and FTSE were up by 1.1%, 0.7% and 1.8% respectively."
On the currency front, the Indian rupee appreciated by 37 paise to close at 73.68 per US dollar on Tuesday, tracking strong domestic equities and sustained foreign fund inflows.
Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said," An incessant rally in domestic equity indices and slide in greenback towards two and half year lows has paved the way for a sharp appreciation in rupee of around 0.64% towards 74.44 mark, wherein it has breached the crucial barrier of 73.80 mark. More positive news about another promising vaccine candidate which looks set to be rolled out soon and upbeat manufacturing data from China has cheered the street and raised hopes of a swifter recovery. This is leading investors to dump dollar and move towards riskier currencies, despite the warning by the Fed Chair that significant challenges and uncertainties for the US economy still remain. All eyes will now be on the Fed's upcoming meeting, where it is likely to come out with further monetary easing measures to boost the economy, amid no further fiscal support in the last few months. Nonetheless, with the 73.80 mark being taken out, we believe that rupee can witness further strength towards the 73.00-73.10 mark in coming days."
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