 "Sensex and Nifty scale fresh highs, but end flat on profit booking")
Indian equity benchmarks on Thursday hit new highs after 14 months, but ended the day flat amid profit booking.
The benchmark Sensex rose to 86,056 to hit a record high, but ended the session at 85,720, a gain of 111 points or 0.1 per cent.
The Nifty 50 hit a fresh peak at 26,311 but ended the session at 26,216, a gain of 10 points or 0.04 per cent.
Both indices had hit their previous intraday highs on September 27 last year.
The market capitalisation of BSE-listed firms declined by ₹59,000 crore to ₹474 trillion.
The gains this week were driven by hopes that the Reserve Bank of India (RBI) and the Federal Reserve could cut interest rates as early as next month.
The fresh economic data from the United States (US), released this week, showed retail sales in September rising modestly, while private payrolls signalled cooling labour-market conditions.
The softer prints have strengthened expectations of an imminent rate cut.
Stocks sensitive to interest rates rose this week after the RBI governor indicated room for further monetary easing.
Indian equities have been rising since October, aided by better than expected September-quarter earnings and renewed hopes of a trade deal with the US.
“We do seem to be bottoming out when it comes to earnings decline, going by the recent quarterly results. At least the earnings downgrades seem to have reduced. We may end 2025-26 with around double-digit earnings, and in FY27 we could get close to mid-teens earnings growth,” said Pramod Gubbi, cofounder, Marcellus Investment Managers.
A selloff in artificial-intelligence (AI) stocks, which led to some buying interest in Indian software heavyweights and growing bets on a global monetary easing cycle, bolstered sentiment in November.
However, profit taking at higher levels has persisted amid concerns about stretched valuations and continued uncertainty over a trade deal.
“Bouts of profit taking are inevitable at all-time highs and will continue until the December earnings season meets expectations and justifies valuations in the broader small-cap and mid-cap segments,” said Sunny Agrawal, head (fundamental research), SBI Securities.
The market breadth, too, has narrowed, with gains concentrated in select heavyweights.
“While at a broader level earnings growth is weak and valuations are high, there are still segments where you can find stronger earnings growth or valuations that are sensible. And as long as either of these criteria is met, those stocks will continue to attract investor attention,” said Gubbi.
The market breadth was weak, with 2,220 stocks declining and 1,936 advancing.
Foreign portfolio investors were net sellers to the tune of ₹1,255 crore, while domestic institutions were net buyers of ₹3,941 crore.
ICICI Bank and HDFC Bank were the biggest contributors to Sensex gains.