Mumbai
The market has returned with the new year. There was a good rise in Sensex and Nifty for the second consecutive day today on January 2. Both the indices are trading up by more than 1 per cent. Around 2 pm, the BSE Sensex rose by nearly 1,400 points to 79,900. At the same time, Nifty gained 440 points and crossed 24,150. The biggest rise was seen in IT and banking stocks.
Sensex- Nifty closed with great gains
On the day of Nifty weekly expiry, there was excitement in the market and Sensex-Nifty closed with great gains. There was buying in midcap and smallcap stocks while there was buying in all sector indices of BSE. There was a good rise in auto and IT shares while banking, PSE and oil-gas indices closed on the rise. There was a rise in metal and realty indices.
At the end of trading, Sensex closed at 79,943.71 with a gain of 1436.30 points or 1.83 percent. Whereas Nifty closed at the level of 24,188.65 with a gain of 445.75 points or 1.88 percent.
Bajaj Finserv, Eicher Motors, Bajaj Finance, Maruti Suzuki, Shriram Finance were the top gainers of Nifty. Whereas Britannia Industries, Sun Pharma were the top losers of Nifty.
Whereas BSE Midcap and Smallcap indices closed up by 1 percent. If we look at the sectoral front, all the sectors closed in the green. The IT index closed with a gain of 2 percent and the Auto index closed with a gain of 3.5 percent.
According to market experts, there were four major reasons behind this spectacular rise in the stock market –
1. Amazing GST collection
GST collection in the month of December increased by 7.3 percent to Rs 1.77 lakh crore compared to last year, which shows the increase in consumption activities. Analysts believe that this increase is a sign of improvement in economic activity, which can strengthen investor sentiment. Abhishek Jain, partner, KPMG, said, “The strong GST collection reflects stable demand and good health of the economy.”
Nifty moved above its 200-day moving average, which supported the market rally. “After crossing 23,770 level, consolidation was expected,” said Anand James, Chief Investment Strategist, Geojit Financial Services. If Nifty remains above 23,850, it can go up to 24,025.” He said that although volatility remains a concern, a decline at this level seems unlikely.
3. Expectation of good quarterly results
The stock market expects good third quarter results of companies. Recently, good business updates were seen from the auto and financial sectors. Expectations of good quarterly results have increased further after seeing the business updates of companies like Maruti Suzuki, Mahindra & Mahindra and CSB Bank. VK Vijayakumar, chief investment strategist, Geojit Financial Services, says luxury consumption sectors, such as jewelery and hospitality, will also perform well.
4: Boom of IT sector
IT shares have been the most important contributor to the ongoing rise in the stock market for the last 2 days. Even today, on January 2, the IT index rose by more than 1 percent. Both CLSA and Citi say that due to stable demand and falling rupee, the growth of IT companies may be better in the December quarter.
“The second week of consolidation suggests that this trend is likely to continue,” said Ajit Mishra, senior vice president (research), Religare Broking. “Traders should focus on stocks showing strong momentum, especially in the pharma and FMCG sectors.”
