Titan, HDFC, Nestle India, IndusInd Bank, Ultra Semco and SBI were the top gainers in the Sensex pack. (representative image)
New Delhi: Equity indices hit a record high on Tuesday with the benchmark BSE Sensex jumping over 850 points on gains in IT, consumer and financial stocks.
Rallying for the second straight session, the 30-share BSE index rose 837 points or 1.65 per cent to end at a new record high of 53,823; While the broader NSE Nifty rose 246 points or 1.55 per cent to end at a new high of 16,131.
Titan rose the most in the Sensex pack, up 4.16 per cent, followed by HDFC, Nestle India, IndusInd Bank, Ultra Semco and SBI.
While Bajaj Auto, Tata Steel and NTPC fell up to 0.28 per cent.
On the NSE platform, except Nifty Media and Metal, all other sub-indices ended in the green with Nifty FMCG Financials rising up to 1.73 per cent.
Here are the top reasons for today’s market rally:
* Rise in tech, FMCG and financial stocks
The market rally was mainly led by information technology, financial services and fast-moving consumer goods (FMCG) stocks, as economic indicators pointed to a recovery in demand.
The Nifty FMCG sector gained 1.73 per cent, the Nifty IT index gained 1.18 per cent and the Financial Services segment gained 1.68 per cent.
According to experts, better-than-expected quarterly results along with healthy macro-economic data boosted investor sentiment.
*Increased factory activity
The country’s factory activity returned last month and the July trade deficit widened to $11.23 billion from $9.4 billion a month earlier, with economists pointing to a normalization of activity after the easing of restrictions.
“India-specific things remain strong with industrial production data and Manufacturing Purchasing Managers Index for July positive,” Anita Gandhi, whole-time director of Arihant Capital Markets, told Reuters news agency. Opening of restrictions is also a positive factor.
*Strong corporate results
IT companies have outperformed expectations in the first quarter of the current financial year, boosting market sentiment.
“Basic support to the bubbles is coming from good corporate results. Now macros are turning very positive with a narrowing fiscal deficit, rising tax collections and now excellent performance in exports. PMI at 55.3 indicates a possible sharp turnaround in economic activity. ,” VK Vijayakumar, chief investment strategist at Geojit Financial Services, told news agency PTI.
* IPO push
E-commerce beauty company Nykaa plans to raise $500 million through its initial public offering (IPO), becoming the latest domestic startup to pursue listing in domestic markets.
So far, around 12 firms have raised Rs 27,000 crore through IPOs in the first four months (April-July) of the current financial year and the pipeline is strong for the rest of the year as well.
* Improved GST collection
In a sign of pick-up in economic activity, tax collections on goods sold and services rendered crossed Rs 1 lakh crore in July as a setback due to a second wave of Covid-related restrictions last month.
Goods and Services Tax (GST) collections grew 33 per cent year-on-year to over Rs 1.16 lakh crore in July, indicating that the economy is recovering at a fast pace. The collection in July 2020 was Rs 87,422 crore.
This is the second highest collection so far this fiscal after a record collection of Rs 1.41 lakh crore in April.
(with inputs from agencies)
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