Sensex Jumps 546 Pts To Cross 54K Record Mark, Nifty Settles Over 16,250 - Here's How Experts Reacted

The benchmark S&P BSE Sensex gained 1% to 54,369.77, rising for the third straight session, while the NSE Nifty 50 index finished 0.79% higher at 16,258.80.

Mumbai: Indian shares closed higher on Wednesday, led by financial and banking stocks, with State Bank of India surging to an all-time high after the country's largest lender by assets reported a record quarterly profit.  

The benchmark S&P BSE Sensex gained 1% to 54,369.77, rising for the third straight session, while the NSE Nifty 50 index, which represents the weighted average of 50 of the largest Indian companies on the NSE, finished 0.79% higher at 16,258.80.

The banking and financial sector drove the market up. The Nifty Bank index, which had lost more than 3% in the previous two weeks, recovered to gain as much as 1% today. While the Nifty Bank increased by 2.33%, the Nifty Financial Services increased by 2.59%.

Top gainers in the Sensex pack included HDFC, Kotak Bank, ICICI Bank, SBI, HDFC Bank, and Axis Bank, rising as much as 4.77%, while Titan, Nestle India, Ultra Cemco, Sun Pharma, Maruti, and Bharti Airtel were the major losers falling up to 2.14 %.

According to analysts, several states announced a relaxation of Covid-induced lockdowns, raising hopes that the domestic economy could recover from the impact of the second wave quicker than expected.

Also, the blue-chip Nifty 50 index's breakout above the critical psychological 16,000-level boosted investor sentiment and drew new buyers into the market.

Mr. S Hariharan, Head - Sales Trading, Emkay Global Financial Services, said, "Nifty is trading close to technical resistance from a trendline connecting earlier highs in CY2021 (Feb & Jun) – seen in conjunction with non-confirmation of strength in Mid-cap & Small-cap indices, which had hitherto been out-performing headline indices, this suggests a narrow advance and potential for a short-term pull-back."

After posting the highest quarterly profits, SBI shares on BSE closed up 2.37% at Rs 457.05 before touching its 52-week high of Rs 467.3 in a firm Mumbai market on Wednesday afternoon, valuing the lender at Rs 4,07,899 crore.

"Long futures open interest for the Retail segment has seen some unwinding over the last week and net long positions are down to mid-Jun levels; this was also evident in cheap roll spreads during July expiry, and points to reluctance to extend leverage on long positions. High-beta sectors appear most vulnerable to a correction in the near-term," Mr. Hariharan added.

Investors are also anticipating the Reserve Bank of India's decision, which begins its three-day monetary policy meeting on Wednesday and is expected to leave interest rates at record lows for the seventh consecutive time on Friday. Markets are keeping an eye on the central bank's upcoming liquidity measures.