Positive Sentiments Continue After RBI's Growth Forecast Hike and Rate Pause
Monday's early trading saw the benchmark Sensex break above the 70,000 barrier for the first time, and the wider Nifty surpass 21,000 as the positive trend in the equities market persisted.
Following the Reserve Bank of India's (RBI) decision to enhance its growth projection for the current fiscal year while maintaining its policy rate stability, the major indexes reached fresh all-time highs on Friday.
Shortly after opening, the 30-share Sensex reached an all-time high of 70,048.90 points. Later, it slightly lost its gains to close at 69,958.13 points, up 132.53 points, or 0.19 percent, from Friday's closing level.
The 50-share Nifty increased to a peak of 21,019.80 points, reflecting similar tendencies. After that, it was up 15.25 points, or 0.07 percent, to trade at 20,984.65 points.
Ten scrips were trading negatively in the Sensex pack, while twenty were trading positively.
Twenty-two of the Nifty's member stocks fell in early trading, while 27 saw gains.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, both local and international indications favor the market's continuous surge being continued despite lofty valuations.
"FIIs turning buyers, strong DII inflows, exuberant retail investors and a thriving IPO market supported by strong economic fundamentals can sustain the rally in the short run ignoring the high valuations," he said.
DIIs, or domestic institutional investors, are referred to as foreign institutional investors (FIIs).
The Nifty finished at 20,969.40 points and the Sensex at 69,825.60 points on Friday. In intraday trading on Friday, the Nifty had crossed over the 21,000 mark.
On Monday, however, conflicting tendencies were seen in Asian markets, with Hong Kong's Hang Seng declining more than 2 percent and Japan's Nikkei 225 rising. On Friday, both US and European equities concluded the day higher.
In the first six trading days of December, foreign portfolio investors (FPIs) showed signs of optimism, spending a total of Rs 26,505 crore in domestic shares.
According to Vijayakumar, the Bank Nifty's superior performance than the Nifty is a noteworthy trend in the market.
"Bank Nifty increased by 5.5% last week, compared to the Nifty's 3.5% gain. This performance is probably not going to end," he said.