On the morning of July 3, the Indian equity markets experienced a historic surge. The Sensex, a 30-share index on the Bombay Stock Exchange (BSE), soared by 597.77 points to break through the unprecedented 80,000 mark, reaching a new lifetime high of 80,039.22. Simultaneously, the Nifty index, encompassing 50 major companies, climbed 168.3 points, setting a fresh record at 24,292.15. The surge was driven by heavy buying in banking stocks and a positive trend in global markets.
Major Contributors to the Rally
Key players in the rally included HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Bajaj Finance, IndusInd Bank, Bharti Airtel, and Nestle, which emerged as the top gainers among the Sensex constituents. However, not all stocks participated in the ascent. Tata Consultancy Services, Sun Pharma, Infosys, and Tata Motors faced declines, indicating selective buying interest focused on the banking sector.
Global Market Influence
Asian markets exhibited mixed trends, with Seoul, Tokyo, and Hong Kong trading in positive territory while Shanghai lagged behind. In the United States, markets ended on a high note on July 2, providing a strong backdrop for the Indian indices’ performance. This global optimism significantly contributed to the buoyant sentiment in the Indian markets.
Volatile Trading on Previous Day
The trading on the previous day, July 2, was marked by volatility. The Sensex experienced a minor decline of 34.74 points, closing at 79,441.45 after reaching a record peak of 79,855.87 during intra-day trading. The Nifty also ended slightly lower by 18.10 points, closing at 24,123.85, despite hitting a lifetime high of 24,236.35 earlier in the day.
External Factors Affecting Markets
The recent fluctuations in the equity markets have been influenced by a variety of external factors. Brent crude, a global oil benchmark, rose by 0.56% to $86.72 per barrel, affecting market dynamics. Additionally, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,000.12 crore on July 2, reflecting cautious investor sentiment amid mixed global cues.
Market Commentary and Analysis
Vinod Nair, Head of Research at Geojit Financial Services, observed that the domestic market took a breather, aligning with mixed global trends. He highlighted concerns over potential rate cuts by the European Central Bank (ECB), recent spikes in US Treasury yields, and a gradual rise in crude oil prices as factors influencing market behavior. Nair also pointed out that investors are closely monitoring the progress of the monsoon, the upcoming Union budget, and the US elections due to their potential global economic implications.
Record Highs and Profit-Taking
On July 1, the Sensex had closed at an all-time high of 79,476.19, gaining 443.46 points, while the Nifty settled at 24,141.95, up by 131.35 points. However, the momentum did not carry over, and profit-taking ensued in sectors like banking, telecom, and automotive. Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd, noted that despite early optimism leading to record highs, the markets succumbed to negative European cues and bearish sentiment in Dow Futures, resulting in a slide into the red.
As the Indian markets navigate through volatile phases, the key focus remains on external economic indicators and policy developments. With the monsoon season, budget announcements, and international political events on the horizon, investors are expected to continue exercising caution while seeking opportunities for growth. The record-breaking performance of the Sensex and Nifty highlights the resilience and potential of the Indian equity markets amidst global economic uncertainties.
(With inputs from agencies)
