12.09.2023
Nifty took 36 sessions
to cross the previous peak of 19,991.85 and went on to scale the 20,000 mark as
well during the session.
Dear Trader –
After playing
hide-and-seek for the last two months, the magical number of 20,000 was finally
seen on Nifty on Monday as investor optimism around India’s leadership at the
G20 summit overshadowed worries arising out of crude hitting the $90 mark.
Nifty Midcap, Nifty
Smallcap, Nifty PSU Bank, Nifty Auto, Metal and Realty indices also hit record
highs. Sensex, which ended at 67,127, is still 493 points away from record high
of 67,619.
The headline index,
which ended in the positive for the seventh straight day, was range-bound in
the last few weeks but small and midcap stocks have been hitting record highs.
Here are 5 key
factors behind today’s rally:
1)
G20 Optimism – The G20 Delhi Declaration and India’s diplomatic triumph
triggered the continuation of the positive market mood and momentum. More
importantly, the inclusion of the African Union in G20 and the proposed
India-Middle East-Europe Corridor have positive economic and market
connotations.
PM Modi’s announcement
of the India-Middle East-Europe Economic Corridor, which will improve India’s
rail, and port connectivity with the US, UAE, and Saudi Arabia, led triggered a
rally in many stocks. Adani Ports ended 7% higher while rail stocks like IRCON,
RITES, IRFC, and RVNL rallied up to 20%.Stocks related to sugar and
ethanol rallied on announcement of G20 Biofuel Initiative over the weekend.
Boost in bilateral trades should benefit various
segments like pipes and cables. Sectors like railways, shipping and logistics
would be direct beneficiaries of G20 announcements.
2) Support from heavyweights – Today’s buying was led
by positive momentum seen in heavyweight Reliance Industries (RIL) and bank
stocks. Adani Ports was the top gainer in the Nifty pack and rallied 7%.
Barring media, all major sectoral indices were
trading in the green. Nifty Bank, Fin Nifty, Nifty FMCG and Nifty IT were up
around 1% each, while Nifty Auto rallied 1.7%.
3) Retail/DII effect – Both retail and other
domestic institutional investors have been pouring money on Dalal Street even
as FIIs have been net sellers so far in September. On Friday, DII buying was
more than Rs 1,100 crore.August month data shows that equity mutual fund
inflows more than doubled to Rs 20,245.26 crore while SIP contribution stood at
an all-time high of Rs 15,813.54 crore.
Nifty
futures opened at 19912.10 points against the previous close of 19872.45 and
opened at a low of 19892.00 points. Nifty Future closed with an average
movement of 159.00 points and a decline of around 173.55 points and 20046.00 points…!!
On the
NSE, the midcap 100 index will rise 1.14% and small cap100 index is rise 1.33%.
At the
start of intra-day trading October gold opened at Rs.58930 fell from a high of
Rs.59099 points to a low of Rs.58920 with a decline of 104 points, a trend of
around Rs.59002 and October Silver opened at Rs.71711, fell from a high of Rs.72297
points to a low of Rs.71700 with a rise of 317 points, a trend of around Rs.71880.
Meanwhile, What is really
impressive about Nifty reaching this all-time high level is that it has been
driven mainly by local flows in recent months, while FPI flow has been relatively
subdued, partly due to limited global interest in Asia funds given the weak
outlook for China which has a very high weightage in the region.
The positive mood on Dalal Street is also
led by expectations of easing inflation, driven by a decline in vegetable
prices.The return of China from deflation, growth in new bank loans, and
reduced concerns about US rate hikes have paved the way for the domestic
markets to reach new all-time highs.
Technically, the important
key resistances are placed in August Nifty future are at 20046 levels, which
could offer for the market on the higher side. Sustainability above this zone
would signal opens the door for a directional up move with immediate
resistances seen at 20188 – 20202 levels. Immediate support is placed at 19977
– 19808 levels.
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