Nifty zooms to all-time high amid buying across sectors: Key factors driving D-St today

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NEW DELHI: Equity benchmark Nifty50 hit a fresh high on Friday as across-the-board buying, with metal and banking stocks in high demand, gave a big lift to Dalal Street. Rapidly falling Covid cases in the country also boosted investors’ mood.

The best news for the economy and markets is coming from the Covid data, which has shown a dip in fresh cases to 1.75 lakh during the last 24 hours. Global cues are positive with the US economy showing a rise in jobs indicating sharp economic recovery, said an analyst.

“Another trend is the increasing preference for value over growth as reflected in the sharp rise in PSUs like SBI, IOC and Coal India, while the likes of HDFC Bank and Kotak Bank remain subdued. Such rotations happen during a bull run. Weakness in frontline private banking stocks may be used to accumulate them since these well-capitalised banks will continue to grab market share from the weaker players, particularly from weak PSU banks,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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How are the blue-chip stocks doing?

After opening in the green, benchmark indices maintained their lead. At 9:38 am, BSE flagship Sensex was up 323 points or 0.63 per cent at 51,438. NSE benchmark Nifty advanced 104 points or 0.68 per cent to 15,442.

In the 50-share pack Nifty, Tata Steel was the biggest gainer, up 3.43 per cent. JSW Steel, Hindalco, Eicher Motors, ONGC, Grasim Industries, BPCL and HDFC were among other gainers.

Sun Pharma was the top loser in the pack, down 2.96 per cent. Dr Reddy’s Labs, Wipro, M&M, Cipla, Nestle India, SBI Life Insurance and Bajaj Auto were other losers in the pack.

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FACTORS IMPACTING MARKETS

Good news

  • Covid cases fall: The Union government on Thursday said that India is now seeing a stabilisation of the second wave of Covid pandemic as the active Covid cases and test positivity rate have maintained a declining trend after peaking in early May.
  • Jobs grow fast: On Thursday, data showed the number of Americans filing new claims for unemployment benefits dropped to the lowest since mid-March 2020, with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy.

Bad news

  • Yields rise: Positive signals on the economy helped lift benchmark Treasury yields back above 1.6 per cent overnight. The 10-year note yielded 1.6147 per cent in Asia on Friday, from as low as 1.5520 per cent mid-week.

Broader markets

Broader market indices traded higher in morning deals but underperformed their headline peers. Nifty Smallcap was up 0.30 per cent while Nifty Midcap rose 0.53 per cent. The broadest index on NSE, the Nifty 500, advanced 0.68 per cent.

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ICICI Securities, Jindal Steel, SAIL, Happiest Minds, Hindustan Copper and CDSL were gainers from the space while Vakrangee, Fine Organic, Aegis Chemicals, TVS Motors, Indiabulls Housing Finance and Page Industries were under selling pressure.

Global markets

Tokyo led the advance, with the Nikkei jumping 1.9 per cent early in the session. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 per cent, hitting its highest level this month, though Chinese blue chips slipped 0.1 per cent just after the open.

The MSCI world equity index added 0.1 per cent to 709.71, nearing the all-time closing high of 710.36 set on May 7.

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US stocks were also poised for further gains after the S&P 500’s 0.1 per cent rise overnight, with futures pointing to a 0.3 per cent increase at the open.

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