Indices hit fresh highs as telecom, utilities surge

Mumbai: India’s stock indices closed at new record highs on Wednesday, spurred by the government’s announcement of relief measures for telecom and auto sectors.

The Nifty ended up 139.45 points or 0.8% at 17,519.45 after touching an all-time intra-day high of 17,532.70. With this, the Nifty is up 10,000 points from the pandemic low of 7,511.1 hit on March 24, 2020. The Sensex ended up 476.11 points or 0.82% at 58,723.20, after logging a record high of 58,777.06 intra-day. The volatility gauge, India VIX, ended up 1.1% at 13.73.

All the sectoral indices on the BSE gained with the BSE Telecom index gaining 3.5% and the Utilities index gaining over 2%.

NTPC jumped 7% to emerge as the biggest gainer on the Sensex, followed by Bharti Airtel, which gained over 4% and crossed the Rs 4 lakh-crore market-cap milestone after the Union Cabinet approved a four-year moratorium on dues for the sector and rationalised the definition of adjusted gross revenue. HCL Technologies, Titan, SBI, Power Grid and TCS gained 2-3%. The Nifty Auto index gained 0.8% after the Union Cabinet cleared the production-linked incentive scheme for the automobile sector.

"The PLI incentive was expected and the relief for the telecom sector bodes well for the banking sector. Global markets have come off a bit, but Indian markets remain in momentum," said Andrew Holland, CEO at Avendus Capital Alternative Strategies.

"We are overdue for a correction for some time. A 5-10% correction wouldn’t surprise me but with liquidity still strong, one cannot predict when this correction will happen. One can’t fight liquidity at the moment," said Holland.

Benchmark indices are up around 130% from the pandemic-triggered lows hit in March 2020. Since then, Indian equities have seen a near vertical climb, with the US Federal Reserve’s reiteration of a dovish stance recently on tapering of bond purchases adding fuel to the rally.

"One may expect further upside towards 17,600-17,700 levels in the next few sessions,” said Nagaraj Shetti, technical research analyst, HDFC Securities.

Sahaj Agrawal, head of research-derivatives at Kotak Securities, expects the Nifty to touch 18,000. Following Wednesday’s gain, the Sensex is 2.17% away from the milestone of 60,000 points and Nifty is 2.74% away from the 18,000 milestone.

"We expect the (Nifty) index to conquer 18,000 and above in the medium term. Options concentration is seen at 17,000 put and 17,500 call — this is indicative of some resistance at 17,500-17,600,” said Agrawal.