Domestic equity benchmarks Sensex and Nifty scaled new peaks on Tuesday, registering record closing highs for a second straight day. The S&P BSE Sensex crossed the 43,000 mark for the first time ever, and the broader NSE Nifty 50 surpassed 12,600, settling at 43,277.65 and 12,631.10 respectively as the market rally stretched to the seventh trading session in a row. The US-based drug maker Pfizer’s statement on Monday that its experimental COVID-19 vaccine, jointly developed with Germany’s BioNTech SE, showed over 90 per cent effectiveness based on initial trial results boosted global market sentiment.
The current rally is fuelled by clarity on the US elections as well as optimism around a COVID-19 vaccine leading to improved world economic outlook, according to analysts.
“While there have been previous announcements of a vaccine, a company like Pfizer coming with such a development and with high efficacy is quite positive for markets,” said Ajit Mishra, vice-president at Religare Broking.
However, many analysts are positive on the current rally in the markets.
“The markets may not see big correction from here and in the medium to long term we see markets doing well,” said Santosh Kumar Singh, head of research at Motilal Oswal Asset Management Company.
Earlier this week, Democrat Joe Biden’s win in the US presidential election fuelled hopes for more fund inflows into emerging markets, pushing Sensex and Nifty to record highs.
“In my view, financials is still an area where good upside may be left with all the banks reporting better credit quality,” he added.
Banking and financial services shares, which have a weightage of nearly 36 per cent in the 50-scrip benchmark, have propelled most of the ongoing rally.
While the Nifty 50 index has recovered 68.17 per cent since its lowest level during the coronavirus pandemic, the Nifty Bank and Nifty Financial Services gauges have rebounded 77.50 per cent and 71.57 per cent respectively.
