Indian Stocks Hit New Records As Nifty Range Shifts Higher

Indian equity benchmarks closed at fresh record highs on Monday, as investors piled on bullish bets on lack of any meaningful concern.

The S&P BSE Sensex climbed nearly 1 percent to 29,910 – a record closing for the 30-share index. It is now just 114 points away from its all-time high of 30,024 it made same period two years ago.

Not to be outdone, the NSE's Nifty 50 index too clocked its best intraday as well as closing levels. The 50-share index gained 0.7 percent to 9,242 – a fresh record closing and 2 points shy from its intraday high.

Five stocks advanced compared to every 2 stocks that declined.

Nifty Range Shifts Higher

• Nifty's indicative range is 9,000-9,500 based on options accumulation of open interest
• Base building seen in the 9,000 and 9,100 based on addition in open interest
• Nifty Bank April futures saw fresh long positions based on addition in open interest

The S&P BSE Capital Goods index gained nearly 3.5 percent, the most since May 2016, led by engineering giant Larsen and Toubro. The company will see additional benefits from “macro tailwinds of industrial capex announcements” in the financial year through March 2018, Jefferies India said in an investor note on Monday.

The brokerage, which has a ‘buy' rating on the stock, hiked its 12-month price estimate to Rs 2,000 from Rs 1,750 earlier.

All sectoral indices, barring the technology and telecom gauges, advanced on the BSE. “Cautiously optimistic” is how Dipen Shah, senior vice president and head of research at Kotak Securities described his view on the market, given the liquidity gush.

The Liquidity Push

Foreign and domestic institutions have together poured in funds worth Rs 35,235 crore in India's equity market in the final quarter of financial year 2017, the highest in six years. The last time India's equity markets saw such a high number was in the October-December quarter of 2010 where with institutional inflows worth Rs 40,197 crore.

The market is currently factoring in very high earnings growth, said Shah. If that doesn't come through, there could be a sharp correction.

In case of a further correction, the Nifty is likely to find support near 8,996 which denotes the previous (closing) highs, according to an Ambit report dated March 31.

Shah advised investors to stick to the tried and tested stocks and exit those that look overvalued. “I think one can pick some of GST-related stocks,” he told BloombergQuint in a phone conversation.