Metal, banking shares gas Sensex to new excessive

Aided by beneficial international cues, the benchmark Sensex on Tuesday crossed 56,000 in intra-day buying and selling once more and closed at a brand new excessive just under the extent. Despite considerations over excessive valuations, the 30-share index rallied 403 factors to shut at 55,958.98 and the NSE Nifty gained 128 factors to 16,624.60 within the bull rally.
The robust rebound in broader markets together with beneficial international cues bolstered optimism in Dalal Street, led by steel, banking and realty shares.
After the gap-up opening, the indices traded range-bound within the first half of the day.

Analysts stated the dominant pattern available in the market in August up to now has been the weak spot within the broader market and a flight to the protection of large-caps, notably IT and defensives like FMCG shares. In August, until now, the midcap index is down 8 per cent and the smallcap index by 10 per cent.
The outperformance of the IT Index (12 per cent rise in August up to now) is a flight to high quality triggered by excessive valuation considerations. The desire for defensives displays rising considerations about excessive valuations and the opportunity of a pointy correction. Nifty is more likely to face resistance at larger ranges as (international institutional traders) FIIs are in a promote mode.