Bulls back in action with relief rally of over 2%; 58 stocks hit record high

The market saw a relief rally on October 4, with the benchmark indices climbing more than 2 percent, adding over Rs 5 lakh crore of wealth to investors’ collective kitty in a single day. This was backed by positive global cues with US futures indicating a strong day on Wall Street.

The broader market also participated in run up as the BSE Midcap and Smallcap indices gained 2.4 percent and 1.5 percent, respectively. More than three shares advanced for every declining share on the NSE.

With the strong momentum, 124 stocks touched their 52-week highs, as per BSE data, of which 58 stocks hit their lifetime highs on Tuesday.

Among them, eight were from the ‘A’ group including Apar Industries, Blue Dart, Garden Reach Shipbuilding, Kalyan Jewellers, Lemon Tree Hotels, Mazagon Dock Shipbuilders and Triveni Turbine.

In the ‘B’ Group category, Bonlon Industries, BSL, Go Fashion, Inox Wind Energy, Karnavati Finance, Max Ventures, Metro Brands, Power Mech Projects, Rainbow Children’s Medicare and Safari Industries hit record highs on Tuesday.

Stocks that hit 52-week highs included Bharti Airtel, Apollo Tricoat Tubes, Chalet Hotels, Cipla, Cochin Shipyard, IDFC First Bank, KRBL, Schneider Electric Infrastructure, Solar Industries, Liberty Shoes, Oil Country Tubular, SAL Steel and Taj GVK.

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The rally was seen across sectors with the BSE Energy, Industrials, IT, Auto, Bank, Financial Services, Capital Goods, Metal, Power and Realty indices rising 2-3 percent.

The BSE Sensex surged 1,276 points or 2.25 percent to 58,065, while the Nifty50 jumped 387 points to 17,274, tracking the rally in European markets and US futures.

On the global front, Germany’s DAX, Britain’s FTSE and France’s CAC were trading 1.8-3 percent higher, while the Dow Jones, S&P500 and Nasdaq futures were up 1.3-2 percent at the time of writing.

Market participants seem to be guessing that the US Federal Reserve may go slow on liquidity tightening given the expected financial risks. If that holds true, foreign institutional investor (FII) flow may turn strong in coming days, which is generally a driving force for any market rally, experts said.

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“The movement in the global markets is in anticipation of a pivot by the US Fed towards slowing down or stopping liquidity tightening due to various financial risks now apparent,” said Nishit Master, portfolio manager at Axis Securities PMS.

He added that business updates shared by banks and other financial intermediaries for Q2FY23 have been encouraging and, thus, the financial sector is leading the rally in India.

Master expects that this move in both the Bank Nifty and Nifty50 can sustain as long as the market believes that global central banks, especially the Fed, will now be inclined to ease or hold off on liquidity tightening measures.

The rally was so strong that it has added Rs 5.6 lakh crore in investor wealth as the BSE market capitalisation rose to Rs 273.9 lakh crore from Rs 268.26 lakh crore in previous session.

FIIs turned net buyers on Monday after consistent and significant selling in the previous eight trading sessions. They net bought Rs 591 crore worth shares on Monday, October 3.

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