Sensex climbs Mt 55K, Nifty tops 16,500: Key factors driving the market

NEW DELHI: Benchmark indices hit fresh record high on Friday, riding on some positive domestic and global cues. Buying was seen in bank and financial services stocks, while metal and pharma scrips were under pressure.

The bull is showing no signs of fatigue as the Nifty raced to another record close. Global support to the rally is intact with the Dow and S&P setting yet another record high. Retail investors relentlessly chasing stocks and the sheer momentum in the market may take the Nifty to 16,500 levels, said an analyst.

“The newbie retail investors are buying stocks without any serious consideration for value. Now, we don't know when and how this rally will end. But we know it will end; and when it does, the new retail investors who have flocked to the market recently will be hit hard,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

How are the bluechips doing?
After opening in the green, benchmark indices rose further. At 11.52 am, BSE flagship Sensex was up 466 points or 0.85 per cent to 55,310. NSE benchmark Nifty advanced 135 points or 0.83 per cent to 16,500.

In the 50-share pack Nifty, M&M was the biggest gainer, up 1.23 per cent. HDFC, Hindalco, ICICI Bank, Coal India, L&T, Bharat Petroleum, TCS, Tata Consumer and ITC were among other gainers.

Eicher Motors was the top loser in the pack, down 1.28 per cent. Power Grid, Tech Mahindra, Tata Steel, Dr Reddy’s Labs, Sun Pharma, Hero MotoCorps and NTPC were other losers in the pack.

“The bulls are buying every dip aggressively and the recent dip in Nifty to 16,165 filled the gap area and took support at rising trendline. It hit a new all-time high of 16,375 and traded in a broadening triangle. The breakout of 16,409 will accelerate the momentum above 16,500 levels,” said Brijesh Bhatia ,Senior Research Analyst Equitymaster. “Midcap and smallcap reversed after testing 50-DEMA; the bullish trend resumption can take these indices to new highs,” he added.

FACTORS DRIVING MARKETS
Good news
Inflation cools off: The decline in CPI inflation to 5.59 per cent in July from 6.26 per cent in June will give comfort to the RBI to continue with its loose monetary policy and accommodative monetary stance.

Jobless claims fall: Americans filing claims for unemployment benefits fell again last week as the economic recovery continued to be bumpy, a separate Labor Department report showed on Thursday.

Bad news:
Dollar firm: The dollar held firm on Friday, staying near its highest level in four months against a basket of currencies as investors looked for more hints from the Federal Reserve on its plans to reduce monetary stimulus.

Broader markets
Broader market indices were trading higher, but underperforming their headline peers in morning trade. Nifty Smallcap was up 0.36 per cent while Nifty Midcap advanced 0.15 per cent. Broadest index on NSE, Nifty 500 was up 0.38 per cent.

Trident, Wockhardt Pharma, Carborundum Universal, Aarti Industries, JSW Energy and Oil India were gainers from the space while Ashok Leyland, Page Industries, Bharat Forge, GMM Pfaudler, IRB Infra Developers and Sequent Scientific were under selling pressure.

Global markets
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.59 per cent, having closed lower on each of the past three days. Japan's Nikkei dropped 0.6 per cent.

Korea's Kopsi dropped 1.45 per cent with Samsung Electronics falling to a seven-month low on concerns that memory chip prices may start to slip around the fourth quarter. Hong Kong fell 0.45 per cent, and Chinese blue chips fell 0.21 per cent.

Australia's ASX200 rose 0.53 per cent to a new record high, lifted by healthcare and technology companies.