Equity

SENSEX AND NIFTY TODAY

by DeepakGupta

Sensex and nifty today rose by close to half a percentage points to close at :

Sensex – 55,555 up by 226.

Nifty – 16,496 up by 46.

Please find the current price of Nifty :

After the scare of last week and Friday, that US Fed will be going for tapering in 2021 itself, which will eventually tighten the liquidity in market, there was some welcome respite today.

US Fed. Their policy action is the single most awaited event this week.

We have a US Fed meeting this week on Thursday and it is expected to be a mix of dovish and hawkish stance.

The scenario currently is kind of goldilocks where in the key data points:

  1. GDP growth.
  2. Inflation.
  3. Consumer sentiment Index.
  4. Unemployment and Jobs Data.

all suggest that the best of growth and inflation is behind us.

Inflation getting moderated and not rising further will ensure that monetary and fiscal stance will be accommodative by Fed and RBI.

With tapering growth numbers, there will be a continuous support by central banks to make sure that policy stance is conducive for growth.

Our own markets, Nifty and Sensex, after making a high in Feb’21 went into the consolidation zone because of Covid 2’nd wave in India. With the gradual opening up of economy and number of Covid cases receding with time, they finally broke out in June’21. Now with vaccination at full pace with 58 crore vaccinations given as of today, the severity of 3’rd wave, even if it comes will be significantly less as compared to second wave.

Even Nomura India business resumption index ( NIBRI ) last week clearly highlighted that Indian business activity rebounded far strongly and quickly as compared to first wave.

With above background and breakout from 16000 levels for Nifty and 53000 levels for Sensex will ensure that we will be going for a target of:

Nifty – 17100-17300.

Nifty 50 and its rise after consolidation.

Sensex – 56500-57000.  

With positive stance and steps taken by government in last so many years and major ones like,

  1. Corporate Tax cut in 2019.
  2. PLI and make in India scheme in 2020
  3. Budget session in 2021 indicating stake sale in PSU’s, big infrastructure and investment push, etc.

will drive and has the potential of making India return to its earlier growth percentage of 8-9%.

This will ensure that above targets for Sensex and Nifty are backed by fundamentals too and not just by liquidity.

Any correction will be a buying opportunity as of now and the stars of this rally will be:

  1. Financials – Large banks like ICICI, HDFC, Kotak, etc.
  2. Metals – Both ferrous and non-ferrous like Tata Steel, Hindalco, Hindustan Copper, etc.
  3. PSU’s – We are bullish on the entire PSU basket including banks like SBI, Canara and others like ONGC, BPCL, etc.
  4. Auto’s – We are bullish on OEM’s and Auto ancillaries companies like Motherson Sumi, M&M, Maruti, etc.

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