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World-beating Sensex breaks many records today

Indian stock market benchmark Sensex hit a new high in monthly derivatives (M&O) expiration today, driven by a rally in IT companies. Global markets were also higher after minutes from the Fed’s latest meeting suggested the US central bank may slow the pace of rate hikes. The Sensex rose 900 points to a new intra-day high of 62,412, breaking the previous record of 62,245 set on October 19, 2021.

The Sensex was 762 points higher at 62,272, also its first close above 62,000. The broader Nifty50 index surged to finish 1.2% higher at 18,484. IT stocks were in the spotlight today with Wipro, Infosys, HCL Tech, TCS and Tech Mahindra jumping between 2% and 3.5%.

However, broader markets saw limited traction today, with BSE mid-cap and small-cap indices up 0.5% and 0.4% respectively.

“The markets surged on the monthly expiration day and gained more than one percent. After the gap-up start, benchmark indices gradually moved up and noticeably gained momentum over the past half hour. As a result, Sensex hit a new all-time high and Nifty moved a little closer to that milestone as well, closing at 18,484 levels. All sectors contributed to the movement in which IT trumped others. The broader indices also posted modest gains, but participation was limited. The markets have regained momentum and we expect the trend to continue. However, participants should not overdo it and continue to buy selectively,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.

“The banking and IT package looks solid in our view, while others see a mixed trend. We reiterate our preference for high-quality index majors and midcaps and propose to focus more on overnight risk management,” he added.

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With a 7% increase this year, the Sensex is on course for a seventh annual advance in a row. The gain is the largest among benchmarks in countries with a stock market of at least $1 trillion, according to Bloomberg.

The minutes of the Fed’s rate-setting meeting in November showed that a “substantial majority” of policymakers agreed that it would “probably soon be appropriate” to slow the pace of rate hikes.

“Benchmark indices ended on a strong note with Sensex closing at an all-time high according to the latest Fed minutes, indicating that the cycle of rate hikes may be slowing. The fall in the dollar index and the price of crude oil also contributed to the upward momentum in the market. Overall, we believe Indian markets are following a positive trend, supported by strong corporate earnings, easing supply constraints, falling commodity prices and strong demand across sectors. Investors should use any significant dip as a strong opportunity to buy into these markets,” said Mohit Nigam, Fund Manager & Head – PMS, Hem Securities.

On a technical level, immediate support and resistance in Nifty 50 are at 18300 and 18600, respectively. Immediate support and resistance in Bank Nifty are at 42500 and 43500, respectively.

The rupee also gained a boost amid broader dollar weakness. The Indian currency ended at 81.63 per dollar against its previous closing rate of 81.84. Yields on Indian bonds also fell. The benchmark yield on 10-year government bonds ended at 7.25% compared to the closing price of 7.2910% on Wednesday.

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