Bulls Eye: Market At New Heights, Investors Wealth Jumps Rs 3.70 Lakh Cr; Nifty May Hit 24,000 Before Budget?

A trifecta effect has taken the Indian stock market to new heights. Sensex has hit a new lifetime high of 73,288.78, and Nifty crossed the 22,000 mark for the very first time. More than Rs 3.70 lakh crore of wealth has been created in just a few hours of Monday's trade. The overall trend is bullish, and the reason will be three factors. First, strong rally in tech giants after Q3 results, second cooling domestic inflation, and third sharp drop in yields.

With the latest rally, the chances of Nifty hitting the 24,000 mark before a general election are high! The parameters fuelling the Indian market look optimistic, and it will not be surprising if Nifty hits 23,000-24,000 levels by even Interim Budget 2024. Corporate earnings for Q3 of FY24 will be a key focus.

In the early trade, Sensex touched a new lifetime high of 73,288.78, while Nifty touched a fresh record high of 22,081.95.

When the Sensex touched a new peak, investors' wealth climbed by Rs 3,70,534.37 crore. BSE listed firms' market cap jumped to Rs 3.77 lakh crore in the early trade of Monday, compared to the m-cap of Rs 3.73 lakh crore last week on Friday.

IT stocks were star performers of the day. BSE IT index touched a new 52-week high of 38,370.51. Stocks like Wipro, HCL Tech, Tech Mahindra, Infosys, and TCS rallied sharply.

TCS, Wipro, Infosys, and HCL Tech have reported their Q3 earnings and the performance has indicated a challenging demand environment with cautious optimism going ahead. HCL Tech has performed better than its peers, while TCS despite a softer quarter exceeded estimates which was a major comfort for investors. Also, Wipro and Infosys results were in line.

However, stocks like Bajaj Finance, Bajaj Finservm L&T, Tata Steel, and Asian Paint are top laggards.

Broadly, the stock market is trading on a bullish note.

Talking about market performance, Manish Chowdhury, Head of Research, StoxBox said, "Markets have conquered new highs today, with Nifty moving above the 22k mark. A host of factors have contributed to today's rally including strong quarterly results by IT bellwethers, cooling domestic inflation and US bond yields falling below 4%."

Also, Dr V K, Chief Investment Strategist, at Geojit Financial Services said that the rally in the market, primarily driven by momentum, is now getting support from fundamentals. He added the sharp bounce in large-cap IT stocks on the back of slightly positive management commentary indicates that an underperforming segment can surprise on the upside on news of a turnaround in the sector. The IT index which shot up by 5% on Friday will remain firm since HCL Tech and Wipro have more room on the upside.

On Nifty, Vijayakumar said, the index has broken out on the upside from the consolidation range and shows signs of a further up move. An important driver of the rally is RIL which is moving up on large delivery-based buying on news of the commissioning of the Dhirubhai Ambani Green Energy project in H2 of 2024. RIL, large-cap IT and banking majors can provide fodder for the bulls in the near-term."

Chowdhury further said, "Markets look poised to move further higher, with Nifty likely to move closer to the 24K mark before the general elections in May. We believe that strong corporate earnings visibility, a likely comeback by the ruling government, strong inflows by both domestic institutions and FIIs and growing appeal of the Indian economy on all facets would provide further traction to Indian markets going forward."

The next big event is the Interim Budget 2024 which will be presented by Finance Minister Nirmala Sitharaman on February 1. The budget is interim ahead of the general election which will be held between April to May 2024. Post the Lok Sabha Elections, the winning party will present the full-fledged Union Budget for FY25, which is most likely in late May 2024 or after.

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