Nifty falls 24 points and Sensex 203 points short of the new peaks

Nifty and Sensex closed Thursday near record highs, boosted by banks and Reliance, with analysts expecting the rally to continue on supportive domestic and global cues

Benchmark indices came within touching distance of new record highs, with the Nifty 50 ending just 24 points short and the Sensex about 203 points away. Both indices gained over half a per cent on Thursday, supported by strength in banking heavyweights and Reliance Industries.

 

The anticipated new highs — likely in the coming sessions — would mark the end of a 14-month consolidation phase, during which weak earnings growth, elevated valuations, and global uncertainty kept sentiment in check.

 

The Sensex last closed at 85,633, with a gain of 446 points, or 0.52 per cent, while the Nifty climbed 140 points, or 0.54 per cent, to 26,192. On a closing basis, the Sensex has made a lifetime high of 85,836 and the Nifty 26,216 on September 26, 2024. Meanwhile, the Nifty Midcap 10 recently hit a new record high earlier this week. The Nifty Smallcap 100 index is currently 8 per cent below its record high logged on December 11, 2024. 

 

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The total market capitalisation of BSE-listed firms increased by ₹67,000 crore to ₹476 trillion, below the record of ₹478 trillion.

 

HDFC Bank, up 1.4 per cent, was the biggest driver of the Sensex’s gains, followed by Reliance Industries, which advanced 2 per cent after brokerages reiterated their ‘buy’ calls. 

Equities have been on an upswing since October, supported by resilient September-quarter earnings and optimism over a possible India-US trade deal. Indian IT stocks have also seen inflows this week, benefiting from a rotation out of major AI-linked stocks. However, on Thursday, most IT names ended flat to slightly lower after stronger-than-expected chip sales from Nvidia eased concerns about AI demand. AI-related stocks globally have come under pressure in recent weeks amid valuation worries and elevated capex.

 

Investors are closely watching cues on potential US Federal Reserve rate cuts and progress on the Indo-US trade agreement. Minutes from the Fed’s October meeting showed policymakers remained split on the need for a third rate cut this year.

 

Both foreign as well as domestic institutional investors (FPIs and DIIs) were net buyers on Thursday. FPIs injected ₹284 crore, while DIIs pumped in ₹824 crore.

 

“Market sentiment was supported by optimism around a potential India-US trade deal. Positioning reflected selective rotation into defensives and quality names. We expect the market up move to continue, tracking domestic cues, global macro data, FPI flows, and a potential announcement on the India-US trade agreement,” said Siddhartha Khemka, head of research – wealth management at Motilal Oswal Financial Services.

 

Market breadth remained negative, with 2,391 stocks declining and 1,805 advancing. Half of the Sensex constituents ended lower.

 

Even on a technical basis, the markets look poised to hit new highs.

 

“With rotational buying across major heavyweights, we expect the uptrend to remain intact, with the Nifty poised to attempt a fresh record high soon and then move towards 26,500. Immediate support lies at 26,000, followed by a key support at 25,800. We maintain a buy-on-dips approach, focusing on largecaps and quality midcaps showing sustained relative strength,” said Ajit Mishra, SVP – research at Religare Broking.