Sensex hits new high as earnings buoy

Cement, heavy engineering, metal stocks soar; midcap sell-off not over yet, warns analyst

The Nifty accompanied the Sensex to new record highs on Tuesday as the two benchmark indices rose on the back of a widespread stock rally spurred by investor cheer over strong corporate results.

Cement, heavy engineering and metal stocks were the stand out performers, even as the rally widened beyond the blue chips to lift midcaps and smallcaps as well on the BSE.

The Sensex added 106.50 points, or 0.29%, to close at a record 36,825.10, while the broader Nifty of the National Stock Exchange (NSE) rose 49.55 points, or 0.45%, to end at a peak of 11,134.30.

Sentiment was also lifted as Asian markets rallied after China vowed fiscal action to support the world’s second-largest economy and Google parent Alphabet reported better-than-expected profit.

The BSE benchmark had earlier scaled an intraday high of 36,902.06, before surrendering some gains on profit booking. The 30-share index saw 20 stocks advance, with Larsen & Toubro leading the pack with a gain of 3.36%. On Monday, the company’s technology arm L&T Infotech had announced a 35% jump in net profit for the June quarter.

Stocks including Asian Paints, Adani Ports, Tata Steel, Infosys, Coal India and Maruti Suzuki India advanced 1-3% each.

“There is still steam left in large caps and the benchmark indices will rise further,” said Harendra Kumar, managing director, Elara Capital.

‘GST fillip’

“Results have been strong and the markets have got further fillip from the government announcements related to GST (Goods & Services Tax). While the market breadth was also strong we cannot say that it is the end of the midcap sell-off. Institutional investors are still selling midcaps to increase their exposure in large caps,” added Mr. Kumar.

Overall market breadth was also strong — a trend not seen on most days in the recent past even when the benchmarks had touched new highs. In 2018, while the benchmark Sensex has risen a little more than 8%, the BSE Midcap and BSE Smallcap indices have declined 12.1% and 15.7% respectively.

On the BSE on Tuesday, almost 2,000 stocks advanced as against only 697 declines. All the broader indices also ended the day in the green. While the BSE Midcap rose 1.77%, the BSE Smallcap index climbed 2.21%.

Cement stocks like ACC, Ambuja Cements, Andhra Cements, India Cements and JK Cements all gained significant ground after ACC reported a marginal rise in net profit compared to the corresponding quarter of the last financial year.

While ACC surged almost 13% to close at ₹1,473.25, other prominent cement manufacturers posted gains of 4-10% each.

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Printable version | Mar 26, 2020 2:37:29 PM |

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