Dalal Street bulls are showing little signs of fatigue. The Indian markets surged for a sixth day on Monday, with the Nifty50 closing above the 15,000-mark for the first time. The rally, triggered by the Union Budget last Monday, has seen the benchmark indices climb nearly 11 per cent is just six sessions.
The benchmark Sensex, too, breached the 51,000-mark to close at 51, 348 – up 617 points, or 1.2 per cent.
The Nifty 50 index rose 191 points, or 1.3 per cent, to end at 15,116. The latest 1,000-point move on the index has come in 25 trading sessions, the fastest, so far. The journey from 13,000 to 14,000 had taken 26 sessions. The latest up-move in the market is on the back of optimism that US lawmakers will pass the $1.9-trillion Covid-19 aid package by the end of this month.
The House gave final approval on Friday to a Budget blueprint that included the stimulus plan. It also approved the legislation necessary to pass the stimulus package through a process known as reconciliation, which requires 51 votes in the Senate. The Senate is split 50-50, with US Vice-President Kamala Harris having the tie-breaking vote.
However, the proposed stimulus package, critics said, could trigger never seen before inflationary pressures. The Brent crude rose above $60 a barrel for the first time in a year.
The rollout of vaccines and the declining trend in infections have kept investor sentiment buoyant, helping most global markets advance. The US jobs data released on Friday also made a strong case for further stimulus by reinforcing the economic risks.
“We just followed through with what is happening globally. People are liking the Budget and the fast vaccine rollout. There is more optimism coming into the week. FPI flows continue to be strong, and as the economy starts the recovery globally, the momentum will sustain,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies.
Analysts said the prospect of stimulus continues to outweigh the economic impact of the pandemic. Improved prospects of sustained economic recovery back home against the backdrop of a sharp increase in capital expenditure and bold reform measures continue to enthuse investors. Analysts said high capex and bold reforms announced in the Budget indicates that recent uptick in high-frequency key economic data and rebound in corporate earnings is likely to sustain in subsequent quarters. However, they advised investors to tread cautiously as the indices are reaching new record each passing day.
“Investors need to focus on companies which have high earnings visibility and margins of safety. In our view, sectors which are the key beneficiary of high capex programme of the government will continue to do well in the medium term,” said Binod Modi, head Strategy at Reliance Securities.
As many as 341 stocks hit their 52-week high, and 337 were locked in the upper circuit on the BSE. The market breadth was positive with total advancing stocks at 1,721 and those declining at 1,313 on the BSE. More than two-thirds of the Sensex components ended the session with gains.
Mahindra & Mahindra was the best-performing stock and ended the session with a gain of 7.2 per cent. BajajFinserv rose 3.2 per cent, and Bharti Airtel rose 2.7 per cent.
All the BSE sectoral indices ended the sessions with gains. Industrials and Auto stocks rose the most, and their gauges fell 4.2 per cent and 3.9 per cent, respectively.