Sensex crosses 78,000 pts on banks, IT

At the same time, Relli believes India still offers visible growth at a good pace over the next few years, unaffected by global developments. Besides, a decent monsoon could improve growth prospects further while bringing down inflation. And a rate cut by the US Fed over the next few months could make equity as an asset class even more attractive, benefiting Indian equities through more inflows, he explained.

Tuesday’s gains were primarily driven by financial services and information technology (IT) stocks. HDFC Bank, ICICI Bank, Axis Bank, Reliance Industries (RIL), Larsen & Toubro (L&T), and Infosys were the biggest contributors to the surge.

Nifty Bank index registered a fresh high on Tuesday, closing 1.7% higher. What acted as a sentiment booster for this sector was the better-than-expected current account numbers.

“India’s current account deficit reduced to 0.7% of GDP in FY24 from 2% in FY23 and recorded a surplus of 0.6% of the GDP in Q4 due to higher services exports,” pointed out Ajay Menon, MD & CEO, broking & distribution, Motilal Oswal Financial Services.

The Nifty has been largely consolidating in a range of 1,000 points for the past couple of months, said Gaurav Dua, senior vice-president and head of capital market strategy, Sharekhan by BNP Paribas. He pointed out that there is buying interest below 22,500 and some selling pressure beyond 23,500 on Nifty.

“We see it as a one-time correction, which is healthy for the sustenance of the rally,” said Dua. He believes sectors such as private banks and IT, along with heavyweights RIL and HUL will have to take up the baton to break out of the range into higher levels.

“Banks have more catching-up on the up, as do IT services and fastmoving consumer goods,” said Relli, adding that prebudget buying could happen in defence, rail, agri-based and infrastructure stocks, whereas oil & gas and pharmaceuticals

The Nifty 50 has been largely consolidating in a range of 1,000 points for the past couple of months