Sensex sets fresh record, hits all-time high of 57000; Nifty nears 17,000

The Sensex hit the 57,000 mark for the first time. At 0930am, the benchmark index was up 0.21% at 57,007, while the Nifty hit a record high of 16,988.

The surge in equities was also bolstered by US Federal Reserve chairman Jerome Powell’s comments that the withdrawal of stimulus will be gradual.

Powell has said the Fed may start paring bond purchases this year but is in no hurry to raise interest rates and will be guided by data on covid-19 risks. However, he didn’t give a specific timeline for scaling back stimulus.

The US Fed’s dovish stance has kept US bond yields and dollar lower, always considered positive for emerging markets such as India, analysts said.

“The festive season has begun in Indian and Indian equity markets as well. Indian equity markets are showing strong resilience and climbing all walls of worry that is a clear sign of a strong bull market”, said Santosh Meena, head of research, Swastika Investmart.

Indian economy is witnessing strong recovery despite being hit hard by the Covid second wave. It is most likely that we are not going to be hit by the third wave as badly as expected earlier on the back of speedy vaccination and some kind of herd immunity, analysts said.

Meanwhile, India’s April-June GDP data is due for release later today, and will show the impact of state-level lockdowns to stem the resurgence in covid infections during the second wave

Analysts polled by Bloomberg estimate that India’s GDP grew 18.5% in the first quarter of fiscal 2022 from a year earlier, reflecting the low base of comparison when nationwide lockdowns were in place in 2020.

However, on a quarter-on-quarter, seasonally-adjusted basis, it estimated that the economy may have contracted 12%.

Investors will keep a close watch on the Purchasing Managers’ Index data and monthly automobile numbers that are also due this week. An OPEC meeting, due on Wednesday, to discuss output boost will also be in focus.

“Rising Delta variant cases and poor monsoon is a concern to the market. From the long term perspective, the overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations. Hence, investors can take advantage of the current volatility and build their positions from the medium-to-long term perspective,” said brokerage firm Motilal Oswal in a report.