Sensex hits fresh record high, tops Mt 53K; Nifty nears 15,900: Key factors driving the market

NEW DELHI: Morale on Dalal Street was high on Tuesday as clouds of sooner-than-expected rate hike waned. The 30-pack Sensex topped 53,000 level to hit fresh record high. PSU banks continued to be in demand, while metal stocks also supported benchmark indices.

Market commentators believe the US Fed rate hikes are the biggest risk for the domestic market in the next two years and recent flip flops on the future trajectory by the Fed officials has kept investors on the edge.

“US markets rallied on Monday, with the Dow completing its strongest session in over three months. Immediate support and resistance for Nifty50 are 15,500 and 15,900, respectively. We expect the markets to be volatile for a few more sessions but with limited downside," said Mohit Nigam, Head, PMS - Hem Securities.

How are the bluechips doing?
After opening in the green, benchmark indices maintained their lead. At 10.20 am, BSE flagship Sensex was up 469 points or 0.89 per cent to 53,044.10. NSE benchmark Nifty climbed 144 points or 0.91 per cent to 15,890.50.

"Yesterday, the Nifty closed above 15,700 which blocked the avenue for the markets to be weak in the short term. We have resumed the uptrend and can target 16,000-16,100 as the next level for the index. Keeping 15,400 as a support for the market, a buy on dips approach will be appropriate to adopt in this market," said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

In the 50-share pack Nifty, Adani Ports was the biggest gainer, up 2.85 per cent. Maruti Suzuki, ONGC, UPL, Tata Motors, Titan, IndusInd Bank, M&M, HDFC and Tata Steel were among other gainers.

Nestle India was the top loser in the pack, down 0.39 per cent. Britannia Industries, Bajaj Auto, HDFC Life Insurance, HUL, HCL Tech, Cipla and Tech Mahindra were other losers in the pack.

FACTORS DRIVING MARKETS

Good news
Fed flip flops: After inducing panic in the market on Monday, Fed officials including St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan toned down their hawkish rhetoric.

Dollar, bond yields fall: The dollar index retreated from two-month highs against its rivals, making emerging markets attractive. The benchmark 10-year yield also held below 1.50 per cent, doubling the effect.

Bad news
Crude oil worries: BofA Global Research raised its Brent crude price forecasts for this year and next, saying that tighter oil supply and demand balances in 2022 could push oil briefly to $100 per barrel. Any rise in crude prices is negative for Indian economy.

Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.90 per cent, while Nifty Midcap rose 0.85 per cent. Broadest index on NSE, Nifty 500 advanced 0.62 per cent.

Adani Total Gas, Gujarat Gas, Indiabulls Housing Finance, PNB Housing Finance, Future Retail and Karur Vysya Bank were gainers from the space, while Quess Corps, Westlife Developments, Strides Pharma, Oil India, GMR Infra and Coromandel International were under selling pressure.

Global markets
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.35 per cent, moving above Monday's four-week lows and notching a 4 per cent gain so far this year.

Japanese shares led the way, with the Nikkei advancing 2.1 per cent. South Korea stocks rose 0.4 per cent, Australia was up 1.2 per cent and Chinese stocks advanced 0.6 per cent

Overnight, Wall Street was led higher by shares of banks and energy firms. The Dow Jones Industrial Average rose 1.76 per cent, the S&P 500 gained 1.40 per cent and the Nasdaq Composite added 0.79 per cent.