Bull Market Marches On: Sensex tops 85,000 milestone, Nifty 50 reaches 26,000 for the first time

Indian benchmark indices extended their winning streak for the fourth consecutive trading session today, reaching another significant milestone as the S&P BSE Sensex crossed the 85,000-level for the first time, achieving an all-time high of 85,163 points, marking the fourth straight session in which the index has recorded new highs.

Likewise, the Nifty 50 also achieved new heights for the fourth consecutive trading day, surpassing the 26,000 points mark for the first time and reaching a record high of 26,011 points. It took the index 38 sessions to rise from the 25,000 mark to 26,000.

However, both indices experienced a slowdown in the final hour of trading, with the Sensex closing at 81,912 points, nearly unchanged from the previous close of 81,928 points. Similarly, the Nifty 50 also ended the session flat at 25,940 points.

Rupak De, Senior Technical Analyst, LKP Securities, said, "The Nifty traded within a narrow range today, taking a breather after a three-day rally. The short-term sentiment remains positive, with the index staying above the critical 21-day EMA, supported by a bullish crossover in the daily RSI. However, for the rally to continue, the Nifty must decisively break above the 26,000 level. Until then, we expect range-bound movement, with the index fluctuating between 25,800 and 26,000 over the next few hours to a few days."

The strong support from the financial services sector and the recovery rally in the auto and realty stocks have contributed significantly to the market's strength. Additionally, the continued rally in PSU stocks is helping the indices to achieve record highs.

Out of the 50 constituents of the Nifty 50, 24 ended in positive territory. Tata Steel led the gains with a 4.3 per cent increase, followed by Hindalco Industries, JSW Steel, Power Grid Corporation, HDFC Bank and Tata Motors-- all are ended with gains between 0.6 per cent and 3 per cent.

Metal stocks shine on China stimulus boost

Metals stocks emerged as the top gainers today, with the Nifty metal index ending the session with a gain of 3 per cent at 9735 points. This surge followed a series of support measures announced by People’s Bank of China (PBoC) Governor Pan Gongsheng amid a deepening economic slump in the country.

In his address, Pan indicated that the central bank would lower the reserve requirement ratio (RRR) for banks by 50 basis points in the near term, effectively reducing the amount of cash banks must hold on hand.

Additionally, he announced a cut in the 7-day repo rate by 0.2 percentage points and hinted at a potential reduction of 0.2–0.25 per cent in the loan prime rate. These measures are aimed at stimulating the economy and addressing growing concerns about its slowing growth trajectory.

The announcement comes as pressure mounts on Chinese authorities to accelerate fiscal and monetary stimulus to meet this year’s growth target of around 5%.

Recent data has revealed concerning trends: industrial output has experienced its longest decline since 2021, while consumption and investment have weakened more than anticipated. Moreover, home prices have fallen fastest since 2014, underscoring the urgent need for effective policy intervention.

As the largest producer and consumer of industrial metals globally, any signs of recovery in the Chinese economy will likely significantly boost metal prices.

Parthiv Jhonsa, Lead Analyst (Metal & Mining), Anand Rathi Institutional Equities said, “The Chinese government is expected to lower the outstanding mortgage rate and reduce the down payment required for second home purchases. Additionally, there may be opportunities to renegotiate or refinance existing mortgages among banks, and the government plans to enhance its re-lending program for state-owned firms to help absorb unsold property inventories.”

"We believe that the Chinese housing market has been struggling for the past four years, and unless there is stabilization in prices and a reduction in unsold inventory, any government initiatives will likely be inadequate," Parthiv Jhonsa added.

Another bull day for PSU stocks

PSU stocks continued their upward momentum for the third consecutive session on Tuesday, with 16 out of the 20 constituents of the Nifty PSE index closing in the green, resulting in a 1% gain for the index.

Leading the charge, NMDC recorded the highest gain at 4%, followed by HPCL, SAIL, BHEL, Power Grid Corporation, Bharat Electronics, Oil India, ONGC, REC, and GAIL, all of which ended the day with gains ranging from 1% to 3.4%.

Over the last three trading sessions, the index has surged nearly 4%.

Nifty Bank snaps 8-day winning streak

The Nifty Bank index ended its eight-day upward trend today with a modest decline of 0.25%. Despite this slight drop, the index reached a new milestone by surpassing 54,200 points, hitting a record high of 54,247 points. 

The recent rally in the markets has been significantly driven by banking stocks, which gained momentum following the US Federal Reserve's rate cut.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.