Markets scale new peaks; pharma, metals shine

The markets rose to fresh lifetime highs for the third consecutive session on Wednesday as they gained for the eighth straight session. The rally was led by pharmaceuticals and metal stocks amid strong global cues. The Cabinet’s approval of Rs 2 lakh crore under the Production Linked Incentives (PLI) scheme also boosted the sentiment. The Sensex rallied 316.02 points (0.73%) to close at 43,593.67. The Nifty rose 118.05 points (0.93%) to close at 12,749.15.

The markets have risen 9.26% so far this month because of the sustained momentum in the global markets on clarity over the US Presidential elections and the anticipation of yet another fiscal stimulus. On the domestic front, an improving economic outlook is helping the markets rise.

The markets rose to fresh all-time highs after the Cabinet approved Rs 2 lakh crore for the PLI Scheme to boost manufacturing in 10 sectors.

Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said, “Investor sentiments got a major boost after the Cabinet approved Rs 2 lakh-crore PLI scheme for 10 manufacturing sectors, including electronic goods, automobile and auto components, pharma, air conditioners and food processing industry.”

Foreign portfolio investors till November 10 have bought stocks worth $2.5 billion. From January till date, the equity markets have received net inflows worth $9.3 billion. Provisional data on the exchanges show on Wednesday FPIs bought stocks worth $827.6 million while domestic institutional investors sold stocks worth $458.2 million.

The markets in South Korea, Taiwan and Japan were up between 1.3% between 1.7%. The European bourses in Germany, France and the UK were up between 0.5% and 0.97%.

According to Kotak Institutional Equities, “The reward-risk balance is less favorable post the sharp run-up in stock prices, but economic recovery and low global and domestic bond yields may support valuations. Most sectors have delivered around 30% return over the past six months, resulting in the market trading at full valuations with ‘growth’ stocks trading at expensive valuations. Also, most ‘quality’ non-financial stocks are now trading above their pre-Covid-19 valuations, led by expectations of a sharp economic and earnings recovery and continued low bond yields.”

The futures and options segment saw a turnover worth Rs 36.38 lakh crore and the cash market witnessed a turnover worth Rs 81,868 crore. This is against the six-month averages of Rs 19.2 lakh crore and Rs 52,327.79 crore.