Fab Friday on D-Street today? After touching 19,992, Nifty eyes 20,000

Continuing with the sustained upward momentum, the benchmark indices scaled new highs on Thursday on the back of a strong rally in banking, fast-moving consumer goods (FMCG) and pharmaceutical stocks. The Sensex and the Nifty50, which had slipped into the red in early trade, scripted a turnaround to end the session with over 0.7 per cent gains.

While the Sensex crossed the 67,500 mark for the first time, the Nifty50 ended the session just shy of 20,000. On the penultimate day trading week, the Sensex rose 474 points, or 0.71 per cent, to end the session at 67,572, the Nifty50 jumped 146 points, or 0.74 per cent, to close at 19,979. The 50-share index made an intraday high of 19,992 — almost kissing 20,000 nearly six years after it first topped the 10,000-point milestone.

On a year-to-date basis, the Nifty50 is now up 10.4 per cent. Market participants view the rally as a testament to India's improving fundamentals.

“India appears to be structurally in a very good position, aided by sound fundamentals and multiple reforms underway. Due to this, the Indian market valuation remains high relative to the rest of the world,” said S Naren, executive director and chief investment officer, ICICI Prudential AMC.

The ongoing rally has been driven by foreign investors. In the April-June quarter of the 2023-24 financial year (Q1FY24), they pumped in over Rs 1 trillion into the Indian market. In July so far, they have invested over Rs 40,000 crore.

On Thursday, they were net buyers to the tune of Rs 3,371 crore. On the day, all the sectors, except IT and consumer durables, ended the session in green. Financials, FMCG and pharma were the top gainers with over one per cent gains in sectoral indices of each of these sectors.

Analysts expect the Nifty50 to top the psychological 20,000-mark soon, provided corporate results are in line with expectations. Infosys, which declared its numbers after market close, reported a 10.9 per cent growth in Q1 profits but trimmed its FY24 revenue guidance to 1-3.5 per cent, from 4-7 per cent, amid an increasingly challenging demand environment. Its depository receipts listed in the US fell sharply after the results announcement.

Shares of ITC rose 2.8 per cent — most among the Sensex and the Nifty50 components — on the buzz around the demerger of its hotel business. ITC’s shares finished at an all-time-high of Rs 492, making it only the seventh Indian company to cross the Rs 6 trillion market capitalisation level.

Kotak Mahindra Bank and ICICI Bank were among the top gainers. On the other hand, Ultra Tech, HCLTech and Bajaj Finserv were the other losers.

Reliance Industries’ first quarter result will be declared on Friday. Its stock rose over a per cent on the back of higher than expected valuations assigned by the market for its financial services spinoff.

“Nifty50 should most likely cross the 20,000 mark on Friday, given the ongoing momentum and clear strength visible in the market. Strong heavy weights results are likely to further influence the market direction in the near term. Investors eagerly await Reliance Q1 results, which will be announced on Friday, and management commentaries on the same — along with further details on Jio Financial Services listing,” said Siddhartha Khemka, head, retail research, Motilal Oswal Financial Services.