A return to normalcy in the economy, the continued rush of retail investors and better-than-expected corporate earnings are helping indices overcome concerns over coal shortages, higher crude oil prices and steep valuations. On Thursday, upbeat earnings from IT companies Wipro and Infosys boosted market spirits.
“It is an extra-strong bullish market. There is massive participation by retail-almost 3-4 million customers are coming every month. In my view, that’s the biggest differentiating factor,” said Raamdeo Agrawal, chairman, Motilal Oswal Financial Services. “Opening up of trade is positive for the market. Shares like IRCTC and DMart (Avenue Supermarts) are seeing a rally as everything is opening up.”
‘Feeling of Optimism in the Air’
Agrawal said strength in corporate profits and the Air India privatisation have also been read positively by global investors.
The Sensex gained 568.90 points or 0.9% to close at 61,305.95 after scaling an all-time high of 61,353.25 during the day. The Nifty logged an all-time high of 18,350.75 before ending 176.80 points or 1% up at 18,338.55. As indices gained, volatility levels cooled off, with India VIX ending down 2% at 15.77.
ITC and HDFC Bank were the top gainers on the Sensex with a gain of 3%. Power Grid, ICICI Bank and NTPC gained 2% each.
Agrawal said banks could be the next sector to take the lead.
“Banks could rally as they are the ultimate mark of opening up of the economy. There is a lot of churn and sustained participation by retail is helping the market,” said Agrawal.
Southeast Asian markets are going up because they’re coming out of a big Covid wave, said Mark Matthews, head of research, Asia, Bank Julius Baer. “In India, the market is going up because there’s a basic feeling of optimism in the air, that everything is starting to fall into the right place, and the economy is going to do very well for the next few years. There are a few exceptions, like the situation with the coal supply,” said Matthews.
