Stock market today: The Indian stock market benchmarks, Sensex and Nifty 50, rose for the third consecutive session, reaching new record highs on Tuesday, July 16. Despite weak global cues and caution ahead of the Union Budget limiting gains, buying in select heavyweight stocks helped the market move upwards.
Sensex hit its fresh record high of 80,898.3, and the Nifty 50 scaled a fresh peak of 24,661.25 during the session.
The 30-share pack closed 52 points, or 0.06 per cent, higher at 80,716.55, while the Nifty 50 ended at 24,613, up 26 points, or 0.11 per cent. This was also the fresh closing high for both indices.
The domestic market has been on a record-breaking spree in July, driven by optimism about a growth-oriented Union Budget, expectations of healthy Q1 earnings of Indian corporates, and the steady progress of the monsoon.
However, gains have been limited due to concerns over high market valuations. Despite the Nifty 50 being in the green for eight out of the 12 sessions in July so far, it has only risen by 2.5 per cent this month.
Most variables are already discounted in the market, with few fresh triggers. Experts believe it can see a decisive move only after the Budget is presented on July 23.
Investors have been selectively buying shares of certain heavyweights while booking profits in others.
Shares of Bharti Airtel, Infosys, ICICI Bank and Hindustan Unilever emerged as the top movers of the Nifty 50 index. On the flip side, those of Reliance Industries, Kotak Mahindra Bank and NTPC closed as the top drags on the index.
Among the global peers, top European markets were in the red when the Nifty 50 closed amid rising speculations that former US President Donald Trump was leading the presidential election race.
According to a Reuters report, while opinion polls show a close race between Trump and President Joe Biden, the former president is leading in several swing states that may decide the election.
The market finds relief in signals from the US Fed indicating a potential rate cut in its September meeting.
As Reuters reported, Federal Reserve Chair Jerome Powell said at the Economic Club of Washington on Monday that "recent inflation data has strengthened policymakers' confidence that price pressures are on a sustainable downward path."
Shares of Coal India (up 3.01 per cent), BPCL (up 2.71 per cent) and Hindustan Unilever (up 2.44 per cent) closed as the top gainers in the Nifty 50 index.
Shares of Shriram Finance (down 2.16 per cent), Kotak Mahindra Bank (down 1.99 per cent) and Dr. Reddy's Laboratories (down 1.55 per cent) closed as the top losers in the index.
Most sectoral indices ended lower today, with Nifty Media (down 1.03 per cent) as the top loser.
Nifty Bank slipped 0.11 per cent, the PSU Bank index dropped 0.25 per cent, and the Private Bank index ended 0.09 per cent lower.
However, Nifty Realty (up 1.66 per cent), FMCG (up 0.96 per cent) and IT (up 0.59 per cent) ended with decent gains.
Vinod Nair, the head of research at Geojit Financial Services, pointed out that the domestic market failed to uphold the opening gains as investors were concerned about current valuations and subdued expectations for Q1FY25 earnings.
"With the earnings season set to fully commence this week, investors are likely to gain a broader sectoral perspective. Globally, the dovish comment from the Fed chief on inflation trajectory and a drop in US 10-year yield ahead of US retail sales data increased the likelihood of a rate cut in September," said Nair.
Prashanth Tapse, senior VP of research at Mehta Equities, underscored that the market remained rangebound throughout the session as investors continued to trade with caution ahead of the Budget announcement. Weak European and Asian cues also weighed on the sentiment.
"There are a lot of expectations from this Budget, and investors don't want to rush into buying stocks; hence, they are in a wait-and-watch mode," said Tapse.
According to Shrikant Chouhan, the head of equity research at Kotak Securities, for the bulls now, 24,665/80,900 would be the immediate breakout level. Above this, the market could rally to 24,750-24,775/81,200-81,300.
On the flip side, Chouhan added that if the index slips below 24,550/80,500, there could be one quick intraday correction. Below this, it could retest the level of 24,500/80,300. Further downside may also continue, dragging the market to 24,425/80,000, said Chouhan.
Jatin Gedia, a technical research analyst at Sharekhan by BNP Paribas, observed signs of a loss of momentum on the hourly charts.
"The hourly momentum indicator has a negative crossover, and the Bollinger bands have also begun to contract, indicating that there could be consolidation over the next few trading sessions. The consolidation range is likely to be 24,700 – 24,500," said Gedia.
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