Nifty scales 17,200-mark; these stocks rallied most

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The ongoing bull run in the stock markets is one of its kind as the benchmark Nifty 50 took just 20 sessions to surge 1,200 points from 16,000 to 17,200, making it the second-fastest rally since the market rebound in March last year. In fact, over the last month, Nifty skyrocketed 1,337 points or 8.4% to an all-time high of 17,222. Likewise, the BSE barometer Sensex zoomed almost 9.35% or 4,968.11 to record peaks of 57,913.46 that it hit on September 01.

The rally is driven by strong domestic inflows led by higher retail investor participation, coupled with hopes of a strong revival in the economy and corporate earnings. That apart the US Federal Reserve’s assurance that an increase in interest rates is some time away has given the market bulls more ammunition to take them higher.

All this has made India the best-performing major global market in the month. The bull run also helped market capitalization of all BSE listed firms surpass Rs 250 trillion mark and is currently at Rs 2,51,22,383.10 crore (10:12 am).

“Nifty made its fastest 1,000-point rally ever – took less than 20 sessions to reach the 17,000 level, propelled by optimism over faster economic recovery. August’21 has been the best month for Nifty over the last 9 months and its YTD (year to date) gain now stands at 22%. BSE companies overall market cap has crossed Rs250 lakh crore for the 1st time,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

Top gainers

The current bull run was largely driven by large cap and bluechip stocks. A closer look at Nifty 50 constituents shows that Bajaj Finserv was the top gainer advancing 21.41% from Rs 14,125 apiece on August 02, 2021 to Rs 17,148 on August 31, 2021. Followed by Bajaj Finance (up 21.35%), Tech Mahindra (up 19.57%), Tata Consultancy Services (up 17.61%), Bharti Airtel (up 17.50%), Hindustan Unilever (up 16.77%), HCL Technologies (up 14.19%), Britannia Industries (up 14.06%) Tata Consumer Products (up 13.88%), Housing Development Finance Corporation (up 13.67%) and HDFC Bank (up 11.16%) were top gainers of the Nifty 50 index.

“The almost incredible market rally continues lifting the Sensex and Nifty above the 57000 and 17000 marks respectively. What stands out in the recent rally of above 400 points on the Nifty is the outperformance of high-quality stocks. It is important to appreciate the fact that the eight stocks – RIL, HDFC Bank, HDFC, Infosys, ICICI Bank, TCS, Bajaj Finance and Bharti Airtel- which have been doing well recently account for 50.7% weight in the Nifty. Therefore, spike in these stocks can lift the Nifty disproportionately. The underperformance of the mid- and small-caps, particularly the removal of the froth in the segment, is desirable even when the market is racing to lofty valuations,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

However, not everything is hunky-dory in Nifty 50 constituents as JSW Steel lost 7.9% as Nifty scaled to 17,200-mark. UPL (down 6.3%), Grasim Industries (down 5.73%), Shree Cement (down 3.44%) Maruti Suzuki India (down 3.26%), Tata Motors (down 3.22%), Bajaj Auto (down 2.96%) and SBI (down 2.03%) were among the top losers on the Nifty.

Outlook

Volumes on the exchanges will be impacted as the final leg of Sebi’s peak margin rule is effective today. That apart rising Delta variant cases and poor monsoon continues to be a concern to the market. “From the long-term perspective, the overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations. Hence, investors can take advantage of the current volatility and build their positions from the medium to long term perspective,” Khemka added.