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Sensex, Nifty50 extend record-breaking run; here are key factors driving D-Street

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Dalal Street continued its record-breaking spree for a second straight day tracking gains across global markets. Strong buying interest in banking and financial services stocks helped the market surge.

Sensex, Nifty50 extend record-breaking run; here are key factors driving D-Street
Indian shares scaled new peaks on Wednesday, with the 30-share benchmark S&P BSE Sensex index closing above the 54,350 mark for the first time ever. The broader 50-share NSE Nifty50 gauge came within 10 points of the 16,300 level during the session.
Dalal Street continued its record-breaking spree for a second straight day tracking gains across global markets. Strong buying interest in banking and financial services stocks helped the market surge.
The 30-scrip BSE index ended 546.41 points or 1.02 percent higher at 54,369.77 and the broader Nifty50 benchmark rose 128.05 points or 0.79 percent to settle at 16,258.80 — both record closing highs. During the session, Sensex and Nifty50 scaled fresh all-time highs of 54,465.91 and 16,290.20 respectively.
HDFC, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, SBI, Axis Bank, Cipla and Dr Reddy's -- ending between 1.07 percent and 4.59 percent higher -- were the top gainers.
On the other hand, Grasim, Titan, Tata Motors, Adani Ports, Hindalco, Bharat Petroleum and Nestle, closing between 1.29 percent and 2.47 percent lower, were the worst hit among the 31 laggards in the Nifty50 universe.
The HDFC twins, ICICI Bank and Kotak Mahindra Bank were the biggest boosts for Sensex, together contributing more than 500 points to the gain in the 30-scrip gauge.
SBI shares ended 2.37 percent higher at Rs 457.05 apiece on BSE, after the country's largest lender reported a net profit of Rs 6,504 crore for the quarter ended June 30, beating Street estimates. Analysts in a CNBC-TV18 poll had forecast a net profit of Rs 6,374.5 crore. (Read more)
Mortgage lender HDFC was the top Nifty50 gainer for a second consecutive session after its Q1 net profit beat analysts' estimates.
Dabur shares saw profit booking, ending 4.23 percent lower at Rs 588 apiece on BSE, after posting better-than-expected earnings for the April-June period.
What's driving the Street?
Analysts say optimism on corporate earnings and coronavirus vaccinations aided investors' confidence.
"The market is driven by momentum and the exuberance of retail investors. It appears that new money is ruling the roost while smart money is skeptical with fundamentals taking a back seat," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told CNBCTV18.com.
Dalal Street took positive cues from global peers, as equities in Asia rose to the highest in one week following overnight gains on Wall Street on upbeat earnings.
"Hopes that India will be a beneficiary of the recent troubles faced by China are keeping sentiments upbeat. While valuations seem high, there is no point in anticipating a top, but rather wait for signs of medium-term change in trend," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Broader markets underperformed the headline indices. NSE's midcap and smallcap indices finished 1.19 percent and 1.01 percent lower respectively.
Godrej Industries, AU Bank, M&M Financial Services, PNB Housing and Trident — settling with gains of between 3.11 percent and 4.99 percent — were the top gainers in broader markets. On the other hand, Vodafone Idea, PI Industries, Indiabulls Housing Finance, Birla Corp and KSCL — falling between 5.12 percent and 18.92 percent — were among the laggards.
The road ahead
Analysts awaited more quarterly earnings from India Inc and the outcome of the RBI's monetary policy review for cues.
"The trend of corporate results, progress of monsoon, monetary policies followed by central banks across the globe are some factors to look forward to in the near term," Jasani added.