Nifty50, Sensex scaled new record highs last week; what lies ahead?

Domestic equity benchmarks scaled unprecedented heights last week with the Nifty crossing the 23,000 mark for the first time and the Sensex touching a record 75,636.5, riding on the back of an across-the-board rally. As many as 46 Nifty stocks registered weekly gains, with Coal India, Cipla, Divi's, L&T and Tata Steel being among the top gainers with upmoves of around 5-7 per cent. 

This surge was fueled by positive market sentiment following the Reserve Bank of India's announcement of a substantial dividend of Rs 2.11 lakh crore to the government. 

This infusion is anticipated to aid the government in reducing its fiscal deficit and bolstering capital expenditure, further boosting investor confidence.

In the coming week, market dynamics will be influenced by a combination of domestic and global economic indicators. Domestically, the focus will be on upcoming financial results from major companies such as Divis Labs, Tata Steel, and Apollo Hospital, whose positive earnings reports could sustain the bullish momentum. 

Additionally, with the Lok Sabha election results looming, market experts anticipate a boost in Foreign Institutional Investor (FII) flows post the verdict.

From a technical perspective, Mehul Kothari, DVP - Technical Research at Anand Rathi Shares and Stock Brokers, notes that while the Nifty has reached the significant milestone of 23,000 and closed the week with gains exceeding 2 per cent, caution is advised as the index approaches the upper boundary of the rising channel around 23,100-23,200. 

Kothari suggests adopting a profit-booking stance at this juncture. However, he emphasizes the robust support levels at 22,800-22,600, underscoring the underlying strength of the market.

Furthermore, global factors such as rising US bond yields and commodity prices, including crude oil, gold, and silver, will be closely monitored for their potential impact on market sentiment. 

Additionally, economic data releases from Japan and the US, alongside movements in the global currency market, will also play a pivotal role in shaping market dynamics in the coming week. 

Investors are advised to remain vigilant and responsive to these evolving factors to navigate the market effectively.

(With inputs from agencies.) 

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