Bulls Charge Ahead: Market Hits All-Time High, Nifty Soars Past 26,000; Sectors That Fueled The Rally!

The Nifty 50 index made headlines on Tuesday as it crossed the 26,000 mark, extending its winning streak to the fourth consecutive session. This milestone reflects a rally that has seen the 50-stock benchmark index surge by over 1,000 points in just nine trading sessions since September 11.

The Nifty 50 first touched the 25,000 mark on August 1, 2024. However, it soon entered a corrective phase as market participants awaited the outcome of the US Federal Reserve's much-anticipated meeting. Following the Fed's decision to cut interest rates, the Nifty 50 rebounded strongly and began its upward trajectory. It took the index 38 trading sessions to climb from 25,000 to 26,000, hitting an intraday high of 26,011.55.

Several stocks played a role in this 1,000-point rally, with Bajaj Auto emerging as the top performer. The automaker has consistently reached new highs, benefiting from robust earnings and strong investor sentiment. Other standout performers during this rally include Shriram Finance and Bharti Airtel.

Interestingly, Hindustan Unilever (HUL), which had been an underperformer on the Nifty for much of this year, made a surprising comeback and emerged as one of the top gainers during this 1,000-point surge. HUL's improved performance reflects the renewed interest in consumer goods stocks.

On the flip side, Tata Motors emerged as the biggest underperformer during this Nifty rally. This is noteworthy, considering Tata Motors was the best-performing stock on the index in 2023, doubling its value last year. The stock has seen a correction from its record highs, which has weighed on its recent performance.

Other underperformers in the recent rally included PSU (Public Sector Undertaking) stocks like ONGC and SBI, as well as private players like Tata Steel and Adani Ports. These stocks, which had initially shown promise earlier in the year, faced downward pressure during this period.

One of the most significant contributors to the Nifty's recent rally was the Nifty Bank index, which has emerged as the driving force behind the sharp upmove in the broader market. As of Monday's close, the Nifty Bank had gained for eight consecutive sessions, surging by over 3,000 points. From struggling to breach the 51,000 mark at the start of September, the index has now tested levels of 54,200.

The banking sector's surge can be attributed to the performance of its two heavyweight constituents, HDFC Bank and ICICI Bank, both of which carry significant weightage on the Nifty 50. Since September 11, both stocks have registered gains of around 7% each, which has contributed to the rise in the Nifty Bank index and, by extension, the broader Nifty 50.

While the Nifty 50 has surged to new heights, the Nifty PSE (Public Sector Enterprises) index has not shared the same fortune. Notably, August 1, the day the Nifty 50 first crossed the 25,000 mark, was also when the Nifty PSE index made a near-term top. Since then, the PSE index has been in decline, with most of its constituents facing downward pressure.

Out of the 20 stocks that make up the Nifty PSE index, only three have delivered marginally positive returns since August 1, while the remaining 17 have experienced declines ranging from 2% to as much as 16%.

Among the worst performers on the PSE index since August 1 are REC and BHEL, both of which were top performers earlier in 2023 and the first half of 2024. The significant drop in these stocks has raised questions about the sustainability of their earlier gains and the factors contributing to their recent struggles.

On the brighter side, HPCL and NTPC managed to register gains of around 3% each, while Oil India edged up by 1%. These three companies are the only constituents of the PSE index that have delivered positive returns since August, reflecting some resilience among state-run enterprises despite the broader decline.