Nifty At New Lifetime High Of 20,291.55, But Top 5 Giants Underperform From September Peaks; 21,000 Soon?

The Nifty 50 surged to a new all-time high, hitting 20,291.55 on Friday. The benchmark index recorded a remarkable surge propelled by broad-based buying amidst mixed global cues. The Nifty Midcap 100 and Nifty Smallcap 100 also hit lifetime highs, reinforcing the market's robust performance

The market optimism was led by India's GDP growth for Q2FY24 and healthy foreign capital inflows. The top-performing stocks driving this surge include Larsen & Toubro, NTPC, Asian Paints, ONGC, and Power Grid Corporation of India.

As of today, the Sensex, BSE's 30-share index rose to an intraday high of 67,557 trading nearly 600 points higher compared to yesterday's close. This means the frontline index is less than 400 points away from its all-time high of 67,925.56.

Over the past month, the Nifty has witnessed a remarkable 6.5% surge, contributing to a year-to-date gain of more than 11.7%. This bullish trend has been fueled by encouraging GDP growth figures for Q2FY24 and significant foreign institutional investor (FII) inflows.

India's GDP growth for the July-September quarter stood at 7.6% making it the world's fastest-growing major economy. According to BSE data, FIIs net bought stocks of Indian companies worth Rs 8,147.85 crore on Thursday.

Technical charts indicate support for the Nifty at 20,100, followed by 20,050 and 20,000. On the upside, 20,200 serves as an immediate resistance, followed by 20,300 and 20,350.

Parth Nyati, Founder of Tradingo, shares his insights, stating, "The Indian equity market is in a strong bullish mood, hitting a fresh all-time high. We may continue our momentum and outperform our global peers, backed by strong fundamentals and under-ownership of FIIs. State election results may create some volatility, but we are preparing ourselves for a pre-election rally. In terms of levels, 21,000 looks like an easy task in the near term for the Nifty."

However, what makes this surge even more notable is the contrasting performance of heavyweight contenders. The top five stocks in the Nifty 50 - HDFC Bank, Reliance, ICICI Bank, Infosys, and ITC - which usually dictate market trends, have posted negative returns since the previous record high on September 15, 2023.

Despite accounting for nearly half of the index's weightage, these stocks have underperformed, creating a unique market scenario. Three out of these five underperforming stocks belong to the banking and IT sectors, both facing challenges with almost 3% declines each since September 15, 2023. The banking sector is grappling with a dip in margins from peak levels, while the IT sector navigates headwinds due to global factors.