Sensex, Nifty End Lower Today After Hitting Record Peaks Intra-Day: Will Market Rally Continue?

The domestic equity markets on Tuesday ended marginally after hitting record peaks, as the BSE Sensex breached the historic 75,000-mark and the Nifty climbed to its fresh peak. Experts said though the surge in indices during intra-day was on continued optimism regarding good earnings growth, a strong economy and total inflows, the fall towards the closing was due to the profit-booking.

Putting a break on its record-breaking rally, the 30-share BSE Sensex declined 58.80 points or 0.08 per cent to settle at 74,683.70. During the day, it climbed 381.78 points or 0.51 per cent to reach the all-time peak of 75,124.28.

The NSE Nifty dipped 23.55 points or 0.10 per cent to 22,642.75. During the day, it advanced 102.1 points or 0.45 per cent to hit the record peak of 22,768.40.

Among the 30 shares on the Sensex, Titan, Reliance Industries, Asian Paints, Tech Mahindra, IndusInd Bank, UltraTech Cement, Wipro and ITC were the major laggards. ICICI Bank, Infosys, Bajaj Finserv, Tata Steel, Axis Bank, Bajaj Finance, Nestle and Mahindra & Mahindra were among the major gainers.

In Asian markets, Tokyo, Shanghai and Hong Kong settled in the positive territory while Seoul ended lower. European markets were trading mostly lower. Wall Street ended on a mixed note on Monday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 684.68 crore on Monday, according to exchange data. Global oil benchmark Brent crude climbed 0.18 per cent to USD 90.54 a barrel.

The BSE benchmark jumped 494.28 points or 0.67 per cent to settle at a new closing peak of 74,742.50 on Monday. The NSE Nifty climbed 152.60 points or 0.68 per cent to 22,666.30.

Why Markets Today Swung from Record Highs To Red Territory?

Rakesh Parekh, MD & co-head (portfolio management services) at JM Financial, said, “Indian markets have crossed all-time highs on continued optimism regarding good earnings growth, a strong economy as well as Total flows that have touched $50 billion for FY24 (of which about $2 billion a month have been domestic systematic investment plans).”

He said the momentum is expected to continue with more vigour for the remainder of 2024, especially post the anticipated return of the present government in June.

Vinod Nair, head (research) at Geojit Financial Services, said, “The Indian market reached a fresh intra-day peak before seeing profit-booking at higher levels in anticipation of tomorrow’s key US inflation data, which carries weight in determining future rate cuts by the US Fed.”

He added that concerns have emerged amid recent better-than-anticipated US employment and manufacturing data, suggesting a potential shift in expectations regarding rate cuts this year.

Prashanth Tapse, senior vice-president (research) of Mehta Equities, said, “Sensex and Nifty scaled new lifetime highs on the auspicious day of Gudi Padwa but markets erased all its gains to end flat with a negative bias on select profit taking. While fundamentals continue to be strong, stretched valuations will allow investors to book profit at regular intervals.”

He added that investors would still be mindful of rising crude prices and the US Fed’s inability to cut rates amid stubborn inflation, which could fuel uncertainty going ahead. For Nifty, the immediate hurdle is seen at the 22,771 mark while the index has support at the 22,255 level.

Rupak De, senior technical analyst at LKP Securities, said, “The Nifty opened higher but struggled to withstand the selling pressure at elevated levels. On the hourly chart, the RSI (14) indicates a bearish divergence, signalling a potential shift in price momentum towards the downside. Immediate support is observed at 22,600; a decisive drop below this level could drive the index towards 22,400. Conversely, resistance is evident at 22,770 on the higher end.”