Markets at mid-day trade: Nifty down 85 points from fresh record high; Coal India top Nifty gainer

After the broader markets recorded their fresh highs in the previous day’s trade, Nifty today scaled to a fresh high of 23,441.95 led by gains in the oil & gas and PSU Bank stocks. In the mid-afternoon trade, Sensex was up by 0.36 per cent or 272.3 points at 76,728.90, while Nifty traded higher by 0.4 per cent or 93.55 points at 23,358.4 points, retreating nearly 85 points from the record high.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services held that the 32 per cent decline in India VIX during the last 5 days indicates that the days of heightened volatility are over and the market has entered a consolidation phase. 

Within the Nifty50 basket, Coal India, PGCIL, Eicher Motors, LTIMindtree and SBI Life Insurance emerged as the top gainers, while top laggards from the pack were Britannia, HUL, M&M, Titan and Tata Consumer Products.

Here are the likely factors for today’s record high scaled on the Nifty:

Optimism around the continuation of reforms:

As Narendra Modi has been sworn-in as the country’s Prime Minister for the third straight term, the Indian capital market is largely cheering policy continuity. 

The market's long-term outlook is shaped by a myriad of factors, including structural economic reforms, fiscal policies, global market dynamics, and corporate earnings growth. It is believed that these fundamental drivers will continue to exert significant influence on market performance.

Broad-based buying:

Sectorally, of the 13 major indices, 11 sectors are seeing buying action, with only Realty and FMCG indices trading in the red. Meanwhile, broader markets continued to exhibit outperformance: For the second straight day, the Nifty Midcap 100 index has logged its fresh high by scaling above 54,000 levels for the first time and hitting a fresh high of 54,262.45. Alongside, the Nifty Smallcap 100 index has also hit its fresh high of 17,787.45.

IT stocks resilient:

After the previous week’s sharp gains to the tune of around 9 per cent, the IT pack continues to buzz amid valuation comfort. All of the 10 stocks constituting the Nifty IT index traded in the green, with LTIMindtree and Tech Mahindra leading the pack.

Meanwhile, the global markets trade on a cautious note as they closely track the US Fed’s policy outcome which is due later today. The central bank is largely expected to keep rates unchanged.Also, the focus will be on both the domestic and US CPI print due to be released today.

Tonight’s US inflation numbers and the Fed policy outcome will influence the direction of the global equity market, added Vijaykumar.