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sensex today: Sensex, Nifty hit record closing highs: Five factors behind the surge

Titan, HDFC, Nestle India, IndusInd Bank, Ultra Cemco and SBI were the top gainers in sensex pack. (Representative image)

NEW DELHI: Equity indices soared to record highs on Tuesday with the benchmark BSE sensex jumping over 850 points led by gains in IT, consumer and financial stocks.
Rallying for the second straight session, the 30-share BSE index surged 837 points or 1.65 per cent to close at new record peak of 53,823; while the broader NSE Nifty settled 246 points or 1.55 per cent up at fresh high of 16,131.
Investors gained Rs 2.30 lakh crore, with market capitalisation of all BSE-listed reaching a lifetime high of Rs 2,40,04,664.28 crore.
Titan was the biggest gainers in the sensex pack rising as much as 4.16 per cent, followed by HDFC, Nestle India, IndusInd Bank, Ultra Cemco and SBI.
Whereas Bajaj Auto, Tata Steel and NTPC were the only losers falling up to 0.28 per cent.
On the NSE platform, except for Nifty Media and Metal, all other sub-indices finished in green with Nifty FMCG, financials rising up to 1.73 per cent.
Here are the top reasons for today’s market rally:
* Tech, FMCG and financial stocks surge
Market rally was led mainly by information technology, financial services and fast moving consumer goods (FMCG) stocks, as economic indicators pointed to a recovery in demand.
While the Nifty FMCG sector gained up to 1.73 per cent, Nifty IT index climbed 1.18 per cent and the financial services segment jumped 1.68 per cent.
According to experts, healthy macro-economic data as well as better-than-expected quarterly results boosted investors’ sentiments.
* Factory activity growth picks up
The country’s factory activity bounced back last month and July trade deficit widened to $11.23 billion from $9.4 billion a month ago, with economists pointing out normalisation of activity after curbs were eased.
“India-specific things continue to be strong, with industrial production data and manufacturing purchasing managers Index positive for July,” Anita Gandhi, wholetime director at Arihant Capital Markets, told news agency Reuters, adding that unlocking of restrictions is also a positive factor.
* Strong corporate results
IT firms have posted better than expected numbers in the first quarter of the current financial year, giving a boost to bullish market sentiments.
“Fundamental support to the bulls has been coming from good corporate results. Now the macros are turning very positive with the declining fiscal deficit, rising tax collections, and now the excellent performance in exports. The PMI at 55.3 indicates a potential sharp turnaround in economic activity,” V K Vijayakumar, chief investment strategist at Geojit Financial Services told news agency PTI.
* IPO push
E-commerce beauty company Nykaa plans to raise $500 million through its initial public offering (IPO), becoming the latest homegrown startup to pursue a listing on the domestic bourses.
So far, around 12 firms have raised a staggering Rs 27,000 crore through IPO route in the first four months (April-July) of the ongoing fiscal, and the pipeline is pretty strong for the remaining part of the year too.
* Better GST collections
In signs of acceleration in economic activity, tax collections on goods sold and services rendered returned to over Rs 1 lakh crore in July after the second wave of Covid-related restrictions caused a blip in the previous month.
Goods and Services Tax (GST) mop-up grew 33 per cent year-on-year in July to over Rs 1.16 lakh crore, indicating that the economy is recovering at a fast pace. In July 2020, the collection was Rs 87,422 crore.
This is the second highest collection so far this fiscal after a record Rs 1.41 lakh crore mop-up in April.
(With inputs from agencies)

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