Indian benchmark indices hit fresh record highs on Monday. While BSE Sensex gained over 300 pts to hit a new lifetime high of 62,484, NSE Nifty50 rose around 90 pts to touch new high of 18,611.05. Reliance Industries was the top contributor as RIL shares surged over 3 per cent to hit five-month high of Rs 2,707.20 on NSE. The oil-to-chemicals conglomerate also helped lift the energy index along with Indian Oil Corp and Oil India. Gains in other index heavyweights such as ICICI Bank, Infosys and Bajaj Finance pushed Nifty to new highs. Bank Nifty was up over 150 pts at around 43150 levels. While Sensex has been hitting fresh highs for three straight sessions, Nifty breached its all-time high of 18604, hit in October last year, in Monday noon deals.
The Nifty IT index rose 0.79% to 30,573.80, extending gains for the third session. The index advanced 3.97% in three trading sessions. Persistent Systems was the top gainers, up 2.03%, followed by Larsen & Toubro Infotech (up 1.44%), Wipro (up 1.34%), Mphasis (up 1.03%), Tech Mahindra (up 0.98%), Coforge (up 0.79%), Infosys (up 0.76%), Tata Consultancy Services (up 0.69%), L&T Technology Services (up 0.28%) and HCL Technologies (up 0.21%) advanced. Among top Nifty gainers, Hero MotoCorp jumped 2.15% after the two-wheelers maker intimated the bourses that it will increase the ex-showroom prices of its motorcycles and scooters, effective from 1 December 2022. Larsen & Toubro rose 0.11%.
In the broader market, the S&P BSE Mid-Cap index rose 0.73% while the S&P BSE Small-Cap index added 0.69%. India VIX, the volatility gauge, rose 1.81% to 13.5750. The Nifty 29 December 2022 futures were trading at 18,725.60, at a premium of 125.75 points as compared with the spot at 18,599.85. The Nifty option chain for the 29 December 2022 expiry showed maximum Call OI of 35.6 lakh contracts at the 19,000 strike price. Maximum Put OI of 37.4 lakh contracts were seen at 18,000 strike price.
Nifty earnings to grow at 17& CAGR over next 2 years
“Nifty today touched its all-time high after its recent rally of more than 10% over last two months. Strong domestic macros, robust earnings growth and sharp correction in oil prices is big positive for Indian equities. For Q2FY23, Nifty companies grew by 9% as compared to expectations of flattish growth. Excluding the global commodities, the growth stood out strong at 33%. Going ahead too we expect the momentum to remain strong with expectation of Nifty earnings CAGR of 17% over next 2 years,” said Ajay Menon, MD & CEO, Broking & Distribution, Motilal Oswal Financial Services Ltd.
Strong fundaments boosting Indian equities
He further said that oil prices have corrected by ~15% and fallen to just above $80bbl which is positive for our oil import dependent economy. Even the wholesale and the retail inflation has cooled off and is showing signs of peaking out. Now, Fed’s commentary on slowing down the pace of rate hike has given boost to the global sentiments which along with strong domestic fundamentals is proving to be a boom for the Indian equities. At the same time, the festive season this year witnessed a buoyant demand – being the first one without any restrictions post 2 years of covid. “The buoyancy in demand is expected to continue with the onset of marriage season. Apart from this the bank credit continues to grow in late teens over last few months and is expected to continue this uptrend with the pickup in capex from H2. India is entering big capex upcycle which would provide leg-up to the overall economy,” Menon said.
There is action in primary market as well. Agrochemical company Dharmaj Crop Guard IPO has received bids of 59.23 lakh shares against an issue size of 80.12 lakh shares, resulting into a 74% subscription, on the first day of bidding. Retail investors are at the forefront, putting in bids for 1.08 times of the shares allotted to the them. Employees have bid for 51% as against 55,000 reserved shares. They will get shares at a discount of Rs 10 a share to the final offer price.