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Benchmark equity indices BSE Sensex and NSE Nifty scaled their fresh record high on Wednesday following gains in index heavyweights including HDFC, Infosys, Reliance Industries amid largely positive global cues. The 30-share index traded 418 points, or 0.78% higher at 54,242 in the early trade. Likewise, the 50-share Nifty was up 114 points or 0.71% at 16,245 at around 9.30 am (IST).

As many as 24 stocks in the Sensex pack traded in the green. With a gain of 2.44%, Tata Steel emerged as top gainer in the index. It was followed by HDFC (up 1.72%), ICICI Bank (up 1.63%), Infosys (up 1.52%) and Dr Reddy’s Labs (up 1.46%). On the other hand, Bharti Airtel, State Bank of India, Nestle India and UltraTech Cement were down up to 0.97%.

Why are Sensex and Nifty rising?

Commenting on the factors which have been supported the domestic equity markets, S Ranganathan, head of research, LKP Securities said, “Bulls pulled off the 16K mark on Tuesday on the Nifty effortlessly buoyed by positive newsflows on GST and export data as domestic fund houses poured Rs 28,000 crore during the first four months of the current fiscal. The journey past 16K today quite clearly has been led by the retail investors who have allocated more into equities even as FIIs sold worth Rs 9,500 crore during this period. The present rally is all the more significant since it provides enough opportunities to the new investor coming in now as several pockets of the economy still offer value going forward.”

Goods and Services Tax (GST) collection increased by 33% year-on-year in July to over Rs 1.16 lakh crore, indicating that the economy is recovering at a fast pace. The collection stood at Rs 87,422 crore in June. This is the second-highest collection so far this fiscal after a record Rs 1.41 lakh crore mop-up in April.

Foreign portfolio investors (FPIs) bought shares worth Rs 2,116.60 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 298.54 crore in the Indian equity market on 3 August, provisional data showed.

On the further movement of Nifty, Amar Ambani, senior president and research head, YES Securities said that the mega rally in the domestic equity market will continue. “We reiterate our Nifty target of 18,000 by December 2021. Corporate balance sheets have been significantly strengthened with record equity raise in FY21. On the revenue front, the listed universe is on firm ground with an accelerated trend of unorganised to organised, digital super-cycle and sustained cost management. We expect the government to continue spending on infrastructure and fast track the reform agenda as we have seen with lowered corporate tax rates, PLI schemes, RBI support, strategic divestments and so on. With accommodative financial conditions worldwide, we see the mega rally in risk assets to continue,” he said.