Tuesday marked a second day of consolidation for domestic equities amid positive global signals. Nifty reached a new high at 21,505 before closing with a modest 0.2% gain at 21,453, while the Sensex settled at 71,437.19, up by 0.17%, hitting an all-time high of 71,623.71 earlier in the day.
The broader market saw slight losses, with Midcap100/Smallcap100 dipping by 0.4%/0.1%, respectively. Notable activity occurred in PSUs, FMCG, and energy sectors, all showing over 1% gains. Siddhartha Khemka from Motilal Oswal Financial Services highlighted the potential for PSU banks to sustainably deliver 1% RoA, likely driving sectoral rerating.
Vinod Nair from Geojit Financial Services noted caution ahead of Eurozone inflation data and highlighted the Bank of Japan's dovish stance impacting sentiments. Stabilization in oil prices due to US plans for Red Sea shipping security influenced market dynamics, while investor interest shifted towards consumption stocks post a surge in growth stocks.
Key Points:
1. Domestic equities experienced a second day of consolidation amidst favorable global cues on Tuesday, showcasing stability in the market.
2. Nifty reached a new lifetime high of 21,505 initially and concluded the day with a slight gain of 34 points at 21,453, as reported by Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.
3. The Sensex also made gains, rising by 122.10 points or 0.17 percent, settling at 71,437.19, hitting an intra-day peak of 71,623.71.
4. However, the broader market, represented by Midcap100/Smallcap100, witnessed marginal losses of 0.4 percent/0.1 percent, respectively.
5. Market activity was notable in specific stocks and sectors, particularly in PSUs, FMCG, and energy sectors, each registering over a 1 percent gain. PSUs banks, in particular, are positioned for sustained 1 percent RoA, potentially prompting earnings upgrades and sector rerating.
6. The market's overall sentiment remains positive, backed by consistent FIIs buying and robust macro data, with FIIs already investing Rs 30,000 crore in equities in December, according to Khemka.
7. Vinod Nair, Head of Research at Geojit Financial Services, highlighted the sustained optimism in the broader market, although the incremental rally is slowing down. Investors are cautious ahead of the Eurozone inflation data announcement, anticipating a marginal drop.
8. The dovish stance by the Bank of Japan (BoJ) contributed to maintaining market sentiment, while the stabilization of oil prices followed the US government's announcement regarding the protection of the Red Sea shipping route.
9. After a recent surge in growth stocks, investor interest is shifting towards consumption stocks as a viable strategy for bargains, as mentioned by Nair.
10. The market showcased stability amidst global cues and sector-specific movements, with investors navigating cautiously ahead of key economic data releases and geopolitical developments.
(With Agency Inputs)
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