In the world of trading and stocks, the D-ST bulls have taken center stage once more. As the Nifty approaches a potential record high, with its sights set on the 22,000 mark, the Sensex makes a robust climb of over 400 points.
Global Support Fuels the Market Surge
The domestic markets find substantial backing from the thriving performance of their US counterparts. The S&P 500 index, on the brink of reaching all-time highs, sets the tone. Both the Dow Jones and the tech-heavy NASDAQ Composite mirror this enthusiasm, climbing by as much as 0.6 percent.
Holiday Lull Shattered: Markets Display Remarkable Activity
Even during the holiday season, a period typically marked by subdued market activity, significant moves are witnessed. Analysts express their surprise at the strong market momentum during this traditionally quiet time.
“The resilience displayed by the market during the holiday season, a period usually lacking significant action, serves as a clear indicator of its underlying bullish sentiment,” notes VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Morning Rally Propels Sensex and Nifty Towards Record Territory
The Bulls make a triumphant return on the morning of December 27, fueled by robust global cues. Within the first trading hour, the BSE Sensex skyrocketed to 71,758, a mere 155 points away from historical highs. Simultaneously, the NSE Nifty 50 hovers above 21,560 points, a mere 28 points short of establishing a new lifetime high.
Analyst Caution Amidst Bullish Surge
While the market enjoys its bullish spree, Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, issues a cautionary note. She warns investors about the potential rise in volatility, with India VIX, measuring market volatility, up over 2 percent at 15 as of 9:55 a.m.
Parekh suggests a cautious approach, stating, “Some sideways movement may be possible, and a ‘wait and watch’ scenario is advisable.”
Anticipating Nifty 50’s Ascent to 22,000
In a conversation with Moneycontrol, Parekh emphasizes that all indicators are aligned for the NSE Nifty 50 to surpass its previous high. “Once we breach Nifty 50’s previous record high, we can set our sights on the 22,000 levels,” she predicts.
Broader Indices Shine Despite Over-Valuation Concerns
During the initial trading hour, broader indices outshine the benchmarks. Nifty Midcap 100 and Nifty Smallcap 100 surged by 0.6 percent and 0.7 percent, respectively. However, analysts raise red flags regarding over-excessive valuations in these segments, emphasizing an inevitable correction.
Sectoral Rally: PSU Banks and Metals Lead the Pack
On December 27, all sectors painted a positive picture, with the PSU Bank and Metals sectors emerging as leaders. Both sectors witnessed gains of over 1 percent in the morning deals.
Motilal Oswal analysts express optimism about the PSU banks, foreseeing a favorable re-rating. In a previous note, they state, “Several public sector banks have raised capital from the market and have shored up their capitalization levels, enabling healthy balance sheet growth. We believe that sustained and consistent performance, coupled with favorable macros, can drive further re-rating of the sector.”
