Closing Bell: Nifty, Sensex script fresh record highs amid hopes of high foreign inflows

Stock market news: Benchmark indices, S&P BSE Sensex and NSE Nifty 50 closed Monday on a strong note after hitting fresh record highs during the day's trade.

The benchmark BSE Sensex was up 0.45 per cent at 84,828.61, while the broader NSE Nifty 50 advanced 0.57 per cent to 25,939.05, lifted by expectations of increased foreign inflows after the US Federal Reserve's rate cut fuelled a risk-on sentiment.

Dr. Praveen Dwarakanath, Vice President, Hedged.in, said, “Nifty continued its walk on the upper Bollinger band, showing signs of further upside. On the downside, the support continues to be at the 25500 level in the index. Momentum indicators show signs of continued bullishness, while the ADX DI+ line has started to trend on the upside. The option writer's data for the present week's expiry shows increased put writing below the 25900 levels and below strikes, while a strong put writing at 26000 levels in the October expiry, indicating that the index is inching towards the 26000 levels before this week's expiry.”

“Banknifty is walking on the upper Bollinger band, a sign of continued upside. On the daily chart, momentum indicators are closer to the over-bought zone, which can trigger a caution for new long positions at present levels. The next immediate levels to watch for in Banknifty on the upside are 54500 and 55000. The option writer's data, for October's expiry, shows the put strikes below 54000 levels saw an increased writing and short covering in a couple of calls below 54000 levels, indicating bullishness in the index, which corroborates with the view presented above," Dwarakanath added.

Fifteen out of sixteen sectoral indices closed in green today showing heightened investor interest. The index heavy-weight, Nifty IT, closed 0.2 per cent lower dragged by Tata Consultancy Services, HCL Tech , and Infosys.

The rally was further buoyed by an outsized rate cut by the US Federal Reserve last week, which has significantly enhanced investors' risk appetite. The broader market also saw positive movement, with the small-cap and mid-cap indices rising by 1.1 per cent and 0.8 per cent, respectively.

Despite the benchmarks entering "overbought" territory, as indicated by a relative strength index above 70, investor enthusiasm remains undeterred. Christopher Wood, global head of equity strategy at Jefferies, stressed in a note that "India remains the best long-term opportunity for equity investors globally." He added that any meaningful correction in the market could lead to increased foreign buying, a sentiment reflected in the recent inflow of Rs 11,516 crore from foreign institutional investors over Thursday and Friday.

On Monday, twelve of the thirteen major sectors advanced, with public sector banks leading the way with a notable 3.4 per cent jump. Oil stocks also performed well, rising 1.9 per cent, largely driven by ONGC , which gained 3.2 per cent following a significant agreement with its overseas unit and eight oil producers to produce natural gas in Azerbaijan.

Automaker Mahindra & Mahindra reached a record high with a 3.4 per cent increase after Goldman Sachs raised its price target on the stock, citing robust growth prospects. ONGC and M&M were among the top gainers on the Nifty.

In the pharmaceuticals sector, Glenmark Pharma saw a 4.3 per cent rise after receiving a satisfactory classification from the US drug regulator for one of its facilities post a routine inspection.

Additionally, Adani Total Gas surged by 5.9 per cent after securing $375 million in financing to expand its city gas distribution network.