Market

Rally in RIL lifts Sensex, Nifty to new highs: Key factors driving the market

NEW DELHI: Disappointing US jobs data came as a relief to traders on Dalal Street who would now expect even slower tapering by the Federal Reserve. Thus, benchmark indices on Monday climbed to fresh highs.

Some of India’s largest companies have seen an exponential rise in the market lap in the last one month. Regular foreign capital inflows on the back of strong global cues and domestic economic activity are expected to further accelerate the rise of India’s key stock indices in the coming future, said an analyst.

“FII inflows, along with sustained DII investment and active retail buying, can impart resilience to the market even at high valuations. Fresh highs are likely driven by the strong uptrend in RIL and renewed buying in banking stocks. The ideal strategy in this bull market is to remain invested with occasional partial profit bookings and moving some profits to fixed income,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

How are the bluechips doing?
After opening in the green, benchmark indices maintained their lead. At 9.20 am, BSE flagship Sensex was up 268 points or 0.46 per cent to 58,397. NSE benchmark Nifty rose 82 points or 0.48 per cent to 17,406.

“On the technical front, 17,400 may act as immediate resistance for Nifty50 followed by 17,500, while 17,100 remains a crucial support for Nifty50,” said Mohit Nigam, Head – PMS, Hem Securities.

In the 50-share pack Nifty,

Industries was the biggest gainer, up 2.68 per cent. Hindalco, Motors, Bajaj Finserv, M&M, HUL, Grasim, L&T and Bajaj Auto were among other gainers.

Tata Steel was the top loser in the pack, down 0.74 per cent. TCS, PowerGrid, , IndianOil, HDFC Bank, , ONGC, Coal India and NTPC were among those that traded in the red.

FACTORS DRIVING MARKETS

Yields rise: Pick up in wages in the US was enough to nudge longer-dated Treasury yields higher and steepen the yield curve, even as markets speculated the Federal Reserve might start tapering later.

US jobs data: Labor Department data showed on Friday that US nonfarm payrolls increased by 235,000 jobs last month, below economists’ expectations of 728,000, as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections.

Rally in RIL shares: Thanks to the finalisation of JustDial deal, shares of the company have been on a roll. The stock hit a fresh record high, lifting benchmark indices as well.

Broader markets
Broader market indices were trading higher, outperforming their headline peers. Nifty Smallcap was up 0.70 per cent, while Nifty Midcap added 0.43 per cent. Broadest index on NSE, Nifty 500 was up 0.48 per cent.

Vakrangee, Engineers India, Trident, M&M Financial Services, Varun Beverages and Bank of India were gainers from the space, while Adani Tital Gas, Prestige Estate Projects, ICICI Securities, Happiest Minds, Thyrocare and JK Lakshmi Cements were under selling pressure.

Global markets
A holiday in the United States made for thin conditions and kept MSCI’s broadest index of Asia-Pacific shares outside Japan flat in early trade.

Japan’s Nikkei added 1.7 per cent, but South Korea eased 0.1 per cent. Nasdaq futures were barely changed, while S&P 500 futures dipped 0.1 per cent.

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