Sensex crosses over 54,000 for first time; Factors driving markets today

The fresh peaks in benchmarks Sensex and Nifty 50 continued for the second consecutive day as investors were buying spree amid better-than-expected July 2021 earnings of India Inc., adequate liquidity, vaccination drive and conducive global sentiments.

Aug 04, 2021 12:08 IST India Infoline News Service

The Indian stock markets are trading at fresh all-time highs on Wednesday and Sensex soared past the 54,000 marks. The fresh peaks in benchmarks Sensex and Nifty 50 continued for the second consecutive day as investors had buying spree amid better-than-expected July 2021 earnings of India Inc., adequate liquidity, vaccination drive and conducive global sentiments.

The stock markets on Tuesday scaled new heights powered by fresh data that indicated a robust economic rebound. On BSE, the market capitalisation has topped Rs2,40,04,664.28cr as on yesterday’s trade.

After scaling its lifetime peak of 54440.8 in early trade, the 30-share index was trading 513 points or 0.95% higher at 54,336 in the afternoon trade. The broader NSE Nifty surged 120.55 points or 0.75% at 16,251.

The major domestic data favour a strong recovery i.e. goods and services tax (GST) collection, automobile sales, purchasing managers’ index (PMI) and the monsoon rainfall trend for July point to a swift economic recovery after the pandemic’s deadly second wave waned in June which boosted the Indian stock market.

Below are the key points that drive the stock market today

FII turns buyer for Indian markets

Foreign institutional investors (FII) have turned buyers now of domestic stocks to the tune of Rs2,116.6cr, as per provisional exchange data. DIIs were sellers to the tune of 298.54cr.

As per the media statement, India stands to be benefitted from China's regulatory crackdown on technology and education companies in recent weeks in the form of FIIs investments.

Macro data rebound 

All major domestic economic data like PMI index, GST collection, corporate earnings and export data favour a strong recovery.

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) moved back above the critical 50.0 threshold — up from 48.1 to 55.3 — in July, pointing to the strongest rate of growth in three months.

Gross GST revenues recovered sharply in July to Rs116,393cr, after slipping below the Rs1 lakh crore mark for the first time in eight months in June.

However, the Indian service sector remained in the red during July. Business activity, new orders and employment declined further, but in all cases rates of contraction moderated from June.

RBI 3-day monetary policy meet starts today

Investors focus has also shifted on RBI who will begin their three-day monetary policy meet from today onward for deciding key rates. The final print of the monetary policy will be presented on August 06.

Markets participants are expecting another status quo in policy interest rates as inflation pressure concerns still pertain from the second wave of the pandemic. It is expected that RBI will hold on to a 4% repo rate as there is little room to move about monetary policies broadly on a global front as higher commodity prices and increasing global rates amid the Covid-19 recovery bequeaths serious implications on production costs. Also, a possible third wave trajectory in the coming months leaves no choice but to have a wait and watch method.

Heavyweight index results in focus

Heavyweight index SBI and Titan will declare their Q1FY22 earnings. SBI crossed over Rs4 lakh cr market cap after the stock hit a new 52-week high of Rs449.80 per piece on Dalal Street.

Other companies that will announce their Q1 are - Hindustan Petroleum Corporation, Adani Green Energy, Godrej Consumer Products, Apollo Tyres, Adani Total Gas, Bharat Bijlee, Blue Star, Bosch, Butterfly Gandhimathi Appliances, Chambal Fertilisers & Chemicals, Cholamandalam Financial Holdings, Cosmo Films, Gabriel India, Greenply Industries, H.G. Infra Engineering, HT Media, Mayur Uniquoters, Nava Bharat Ventures, PNB Housing Finance, Solara Active Pharma Sciences, Sonata Software, Subros, Tasty Bite Eatables, Tata Communications and Thomas Cook (India).

Global markets

On Wall Street, overnight, US indices bounced back to close at an all-time high as Dow Jones crosses 35,100 with global cues prompting a strong rally. Bond yields remain unchanged near 1.17% while US$ also closes flat at 92.07. Banks, industrials lead the rally with technology stocks also seeing buying interest.

Asian markets were mixed with Hong Kong's Hang Seng index outperforming and Japan's Nikkei 225 witnessing a cautious movement. Hang Seng surges over 410 points, while Nikkei 225 dives 70 points. South Korea's KOSPI climbed 1%, while China's Shanghai Composite and Australia's S&P/ASX jumped 0.6% and 0.3% respectively.

Sectoral indices at this hour

On the sectoral front, Nifty Banking and Financial Services soar 2% to drive trade. All the other sectors except Metal stocks are in the negative zone with realty stocks also dipped 1.5% while PSU Bank stocks struggle.

Bank Nifty was up 1.88% and trading at 35,868 points. ICICI Bank was up more than 3%, followed by Kotak Mahindra Bank, AU Small Finance Bank, HDFC Bank, and Axis Bank.

Gainers & Losers on Nifty 50

HDFC, Kotak Bank, ICICI Bank, HDFC Bank, and Axis Bank are the top gainers. Grasim, Sun Pharma, Tata Motors, Titan, and Tata Consumer are the top losers.

Meantime, the majority of the Sensex constituents were down with losses with Sun Pharma and Titan were down more than 1% each as the top laggards.

Four IPOs open today

Devyani International is eyeing to mop up Rs1,838cr in the price band of Rs86-90, whereas Krsnaa Diagnostics aims to raise over Rs1,213cr with a price band of Rs933-954.

Among the other two IPOs, Windlas Biotech (Rs402cr) and Exxaro Tiles (Rs161cr) will sell their shares in the Rs448-460 and Rs118-120 apiece, respectively.

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