Banks, IT take Nifty to new high, countdown begins for next record

Nifty Midcap 100 index touched the 50,000-mark for the first time at the opening but ended the session almost flat, while Nifty Small-cap 250 rose 0.62%. Out of the 3,947 shares traded on the BSE, 2382 advanced, and 1,465 declined.

"The Nifty index amid huge fluctuations finally managed to close above the 22500 zone with bias maintained strong," said Shiju Koothupalakkal - Technical Research Analyst at Prabhudas Lilladher. "The scope for further upward move has much improved with next targets of 22,800 and 23,200 levels visible in the coming days."

The Nifty has gained 3.5% so far in 2024.

Pankaj Pandey, head of research at ICICI Direct said his near-term target on the Nifty is 23,400 and for 2024 is 25,000.

Nifty's Volatility Index or VIX - a fear gauge - fell 1.34% to 11.22 at close, suggesting traders see lower risks in the market in the near term. The index is at its lowest level since November 2023.

Foreign portfolio investors net sold shares worth ₹1,367 crore. Domestic institutions were sellers to the tune of ₹893 crore.

The Bank Nifty Index gained 0.9% ahead of the RBI's Monetary Policy Committee meeting on Friday when the central bank could provide some direction on interest rate cuts. Nifty's Private Bank and index have been the top gainers, advancing 1.12% and 1.08%, respectively.

"Bank and IT stocks, which make the majority of Nifty, have been lagging and any incremental positive news in these sectors will take the market to new highs," said Pandey. Financial services and information technology make up about 46.6% of the Nifty.

Defence and railway stocks are likely to "perform with high probability" during this month, said Koothupalakkal. "Energy, as well as renewable energy stocks, would also be among the favourites."

Elsewhere in Asia, China declined 0.18% Hong Kong fell 1.22%, and Taiwan dropped 0.89%. South Korea gained 1.29%

The pan-Europe index Stoxx 600 was flat at the end of trading.