Sensex gains for eighth day in a row, logs fresh highs for 2023

FPI flows, positive economic data propel equities

The benchmark Sensex gained for an eight consecutive trading session on Tuesday to record new highs for the 2023 calendar year.

Backed by sustained inflows from foreign portfolio investors (FPI) and positive economic data, the 30-share index rose 242 points, or 0.4 per cent, to close Tuesday at 61,354 points, its highest level since December 20, 2022.

The index has added 1,787 points -- or 3 per cent -- in the past eight sessions of uninterrupted run. This is the second longest gaining streak for the index in less than a month. Between March 29 and April 13, the Sensex had gained for nine straight trading sessions.

The Nifty50, on the other hand, rose 82 points or 0.5 per cent to close at 18,147, its highest point since January 18. This was the sixth straight day of gains for the 50-share index.

The latest gains come despite mixed global cues. Equity benchmarks in Australia and Europe were either muted or declined amid rate hike concerns. The Australian Central Bank on Tuesday hiked the benchmark rate by 25 basis points (bps) and said that further hikes might be required. There was also some nervousness ahead of the US Federal Reserve's (Fed) two-day meeting which was to begin later on Tuesday. The Fed is expected to hike rate by 25 bps. The European Central Bank may also increase its benchmark rate by 25 bps.

Back home, positive FPI flows and economic data kept sentiment upbeat. On Tuesday, FPIs bought shares worth nearly Rs 2,000 crore even as domestic institutions pulled out close to Rs 400 crore.

Meanwhile, the manufacturing Purchasing Managers’ Index (PMI) rose to 57.2 in April from 56.4 in the previous month. The PMI has been above 50 for 22 straight months. A measure above 50 signals expansion. Similarly, the goods and services tax (GST) collection during April, at Rs 1.87 lakh crore, was the highest monthly mop-up since the scheme was rolled out in July 2017.

The day’s market breadth was strong with 2,179 stocks advancing and 1,314 declining. More than half of the Sensex stocks ended with gains. Tech giant Infosys rose 2 per cent and was the biggest contributor to index gains. Sun Pharma, on the other hand, declined the most among Sensex components with a loss of 1.5 per cent.

"We may see some consolidation citing caution ahead of the outcome of the US Fed meeting. However, the tone is likely to remain positive so maintain the ‘buy on dips’ approach. Sectors like energy, IT and metal are now trying to catch up with the other key sectors, which is further adding to the buoyancy," said Ajit Mishra, vice president, technical research, Religare Broking.