D-Street hits record high as Powell's dovish tilt gives bulls fresh shot in the arm

Following indications from Federal Reserve Chair Jerome Powell that moderation in rate hikes is likely from December itself, benchmark equity indices extended their gains for the eighth straight day on Thursday to hit fresh record highs. Gains were led by index heavyweight Reliance, banking and IT stocks.

BSE Sensex was trading 376 points or 0.60% higher at 63,475. Nifty50 was trading at 18,848, up 90 points or 0.48% at around 9.18 am.

In the last eight days, Sensex has zoomed over 2,400 points or 4% to touch new frontiers. During this period, investors have turned richer by Rs 8.89 lakh crore. The market capitalisation of all listed companies on BSE touched a fresh high of Rs 289.8 lakh crore.

“Fed chief Powell’s observation that “it makes sense to moderate the pace of rate hikes” has come as a shot in the arm for the bulls to take the ongoing rally forward. The dip in the dollar index to 105.5 and the US 10-year bond yield declining sharply to 3.63 % are hugely favourable for the continuation of FII inflows,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

“For the near-term, concerns of elevated valuations are likely to be ignored by the market. However, investors should be cautious while chasing this rally. Even though the Sensex and Nifty are at record highs, the Midcap index and Smallcap index are 2% and 17% away respectively from their peaks,” Vijayakumar added.

Among Sensex stocks, Infosys, Tech Mahindra, Wipro, HCL Tech, TCS and L&T were the top gainers, rising about 1.5-2%. HDFC Bank, Tata Steel, Sun Pharma, HDFC, Dr Reddy’s Lab and Nestle also opened higher.

On the other hand HUL, M&M, Asian Paints, Maruti, Power Grid, ICICI Bank and Axis Bank opened lower.

Sectorally, Nifty IT rose 1.99% while Nifty Metal surged 0.93%. Nifty Oil & Gas and Nifty Financial Services also opened higher. In the broader market, Nifty Midcap50 increased 0.21% while Smallcap50 advanced 0.68%.

Meanwhile, NSDL data shows FIIs poured in nearly $5 billion in November, out of which $1 billion came yesterday amid rejig in MSCI indices.

Global Markets
US stocks finished sharply higher on Wednesday after Powell indicated smaller rate hikes going ahead. Dow Jones rose 2.18%, S&P 500 surged 3.09% and Nasdaq advanced 4.41%.

In early trade in Asian markets, Japan’s Nikkei 225 increased 1.11%, South Korea’s Kospi rose 0.22% and China’s Shanghai Composite advanced 0.65%.

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