Banking boom sends Sensex soaring past the historic 78,000 mark

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Nifty projected to reach 25,200 by December this year: ICICI Securities What drove the upward move of the market on Tuesday was gains in financial services and information technology (IT) stocks. HDFC Bank, ICICI Bank and Axis Bank, Reliance Industries (RIL), Larsen & Toubro (L&T), and Infosys were the biggest contributors to the surge. Nifty Bank index registered a fresh high on Tuesday, closing 1.7% higher.

What acted as a sentiment booster for this sector was the better-than-expected current account deficit. “India's current account deficit reduced to 0.7% of GDP in FY24 from 2% in FY23 and recorded a surplus of 0.6% of the GDP in Q4 due to higher services exports," highlighted Ajay Menon, MD & CEO, broking & distribution, Motilal Oswal Financial Services. The Nifty 50 has been largely consolidating in a range of 1,000 points for the past couple of months, said Gaurav Dua, senior vice president and head - capital market strategy, Sharekhan by BNP Paribas.

He pointed out that there is buying interest below 22,500 and some selling pressure beyond 23,500 on Nifty. “We see it as a one-time correction, which is healthy for the sustenance of the rally," said Dua. He believes sectors such as private banks and IT along with heavyweights RIL and HUL will have to take on the baton to break out of the range into higher levels.