Indian equity benchmarks hit new highs; Nifty tops 24k, Sensex breaches 79K

FPI buying, gains in RIL, IT pack help indices log new highs for a 10th time in June

Indian equity benchmarks hit new highs on Thursday, driven by gains in Reliance Industries and strong foreign portfolio investor (FPI) buying.

The BSE Sensex ended the session at 79,243, up 569 points or 0.7 per cent over its previous close, while the National Stock Exchange (NSE) Nifty finished at 24,044, gaining 176 points or 0.7 per cent. The Sensex crossed the 79,000 level and Nifty the 24,000 mark for the first time, both indices notching up their 10th record high for the month.
 

The overall market cap of BSE-listed firms increased by Rs 1.4 trillion to about Rs 438 trillion. Despite a sharp correction at the start of the month following the election results, the Bharatiya Janata Party’s return to power with the help of allies have led to hopes of policy continuity.

Strong macroeconomic indicators and FPIs turning net buyers have driven the indices’ best monthly gains this year. FPIs on Thursday were net buyers to the tune of Rs 7,658 crore, according to provisional data from exchanges. With this, FPIs have turned net buyers for calendar 2024, too.

 

So far this month, the Sensex has gained 7.1 per cent, and the Nifty 6.7 per cent, driven primarily by private banks, where FPIs have their biggest exposure. The Nifty Private Bank index has gained by 9 per cent.

Four stocks — Infosys, Reliance Industries, Tata Consultancy Services, and Ultratech Cements — contributed to more than half of Thursday’s gains. Reliance has gained 7.1 per cent so far in June, while the information technology heavyweights have benefitted from bargain hunting.

Independent equity analyst Ambareesh Baliga said the gains in heavyweights were propelling the indices to new highs, with a shift from small and midcaps to largecaps due to elevated valuations. “After the election results, there is nothing that could pull the markets. But any negative news flow will damage the markets as the valuations are elevated,” he said.

Analysts said robust earnings would be important for justifying the elevated valuations. At present, the Sensex is trading at a trailing-twelve-month (TTM) price to earnings of 24.7 against its five-year average of 25.6.

“Strong corporate performance reinforces market stability and investor trust. Equally important will be the government's effectiveness in implementing pro-growth policies that stimulate economic activity. The upcoming Union Budget will be closely watched for potential sector-specific policies,” said Tradejini Chief Operating Officer Trivesh D.

Market breadth was weaker, with 2,463 stocks declining and 1,434 advancing. Four-fifths of Sensex stocks gained; Ultratech Cements, up 5.07 per cent, rose the most among Sensex stocks.