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Informist, Wednesday, Aug 28, 2024

By Noel John

MUMBAI – The Nifty 50 index rose almost throughout the day, made a fresh record high late in the session, and then gave up almost all its gains to end marginally higher. The new record high, after 18 sessions, was led by gains in information technology shares. Indices fell consistently in the last hour as investors booked profits, but the gains during the day were enough to mark another record closing for the Nifty, analysts said. The Nifty 50 index has extended gains for 10 straight sessions, while the Sensex ended up for the seventh straight session today.

The 50-stock index hit a record high of 25129.60 points, while the Sensex's intraday high was just 90 points shy of its record high. The Nifty 50 ended at a record closing high of 25052.35 points, up 0.1% from Tuesday. The Sensex ended 0.1% higher at 81785.56 points. The immediate resistance for the 50-stock index is now pegged at 25100 points, while the support is seen at 24900 points, Ajit Mishra, senior vice president of research at Religare Broking, said. 

Positive cues from global equity markets, strengthening hopes of a rate cut by the US Federal Reserve, a better monsoon, and continued robust inflows from domestic investors are driving up the markets, Chokkalingam G., founder and head of research of Equinomics Research, said. The trend of benchmark equity indices outperforming the broader market indices will likely continue in the short term due to stretched valuations in midcap and smallcap indices, Chokkalingam said. 

Shares of IT companies were the major gainers today, with LTIMindtree ending 6.5% higher to become the top gainer on the Nifty 50 index. "Positive global cues and interest rate cut expectations in the US Federal Reserve's September meeting are leading to buying interest in IT stocks," Ruchit Jain, lead research analyst at 5paisa, said. 

Shares of LTIMindtree rose 6.5% to end at 6,127.55 rupees after brokerage firm Kotak Institutional Equities upgraded the stock rating to 'add' from 'reduce' as it expects the company to bounce back from the trough of 2023-24 (Apr-Mar) in the next couple of years. The brokerage also raised the stock's target price to 6,200 rupees. The brokerage believes the company is on the path to a healthy recovery in topline growth in the next couple of years, aided by a recovery in spending in the banking and financial services vertical, the Business Standard newspaper reported.

The stock also got a boost from the Karnataka High Court order staying the goods and services tax demand order of 3.78 bln rupees on the company.

Although businesses have pushed savings-led transformation deals recently, the improvement in the macroeconomic environment is likely to boost sentiment and help resume long-deferred discretionary programs for IT companies by late 2024-25 (Apr-Mar) or early 2025-26, brokerage firm Prabhudas Lilladher said in a report today. "Having said that, we maintain caution on the near-term US election outcome, which might delay deal closure activities or execution of projects that have a higher onsite mix," the brokerage said. 

Shares of pharmaceutical companies also gained with Divi's Laboratories, Cipla, and Sun Pharmaceutical Industries among the top gainers in the Nifty 50. Even after the recent gains, pharmaceutical companies could see further upside as they are expected to deliver strong results in the coming quarters, Maitri Sheth, research analyst with Choice International, said.  

Owing to the rise in IT and pharmaceutical stocks, the Nifty IT, Nifty Healthcare, and Nifty Pharma were the best performing sectoral indices. All three of these indices also hit their all-time highs today. 

Shares of Bharti Airtel ended 2.2% higher at 1,556.35 rupees, to become one of the top gainers on the Nifty 50. The stock rose after brokerage firm UBS raised the company's target price by 65 rupees to 1,595 rupees. Shares of Trent ended 5.4% higher at 7,242.10 rupees after brokerage firm Bernstein initiated coverage on the company with an 'overperform' rating. The brokerage has set the target price for the stock at 8,100 rupees. 

Shares of NBCC (India) ended 10.2% higher at 195.71 rupees to become the top gainer in the Nifty 500 index. The shares rose after the company on Tuesday said its board will meet on Saturday to consider issuing bonus shares. "NBCC has registered a bullish breakout on charts, and it is all set to achieve 215 (rupee) levels in the immediate near term," said Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market. 

On the downside, shares of Tata Elxsi ended 8.3% lower, becoming the worst performer in the Nifty 500 index. The stock fell after rising nearly 30% in the last four sessions. Kotak Institutional Equities said the stock was expensive even before the recent rally and added that challenges for the company will likely to continue, at least over the foreseeable future, as per a post by ET Now on X. 

* Of the Nifty 50 stocks, 21 rose and 29 fell

* Of the Sensex stocks, 10 rose and 20 fell

* On the NSE, 1,171 stocks rose, 1,547 fell, and 94 were unchanged

* On the BSE, 1,815 stocks rose, 2,147 fell, and 94 were unchanged

* Nifty IT: up 1.6%; Nifty Healthcare: up 1.2%; Nifty Media: down 1.4%

BSE                                               NSE
Sensex: 81785.56, up 73.80 points or 0.1%         Nifty 50: 25052.35, up 34.60 points or 0.1%

End

Edited by Saji George Titus

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