Nifty inches towards 20,000, Reliance leads the gains

Nifty, Sensex advanced on Thursday as an uptick in Reliance Industries and broad sectoral gains overpowered a slide in information technology (IT) stocks.

The Nifty 50 index closed 0.74 per cent higher at 19,979.15, while the S&P BSE Sensex gained 0.71 per cent to 67,571.90. Both the indexes recovered from a lacklustre start and hit new all-time highs for the fifth session in a row, with the Nifty 50 closing just below the 20,000 mark.

Index heavyweight Reliance Industries gained 1.54 per cent, after a new price discovery post its demerger with Jio Financial Services. The discovered price for Jio Financial Services was higher than Street estimates of 160-190 rupees.

IT Stocks

IT stocks were an exception, shedding 0.66 per cent. The index, which rose sharply after data showed a moderation in US inflation last week, closed flat in the previous session.

IT firms earn a significant share of their revenue from the US and Europe. Infosys was the top Nifty 50 loser, ahead of its June-quarter earnings later in the day.

The rally continued in broader markets as well, with the midcap index hitting a fresh record high and the small-caps hovering around a 52-week high, respectively.

"The euphoria in the markets will probably continue despite stretched valuations," said Mayuresh Joshi, head of equity research at William O'Neil and Company. "Foreign inflows will likely power the markets further, aided by hopes of a soft-landing for the US economy and concerns over China's recovery."

Asian and European markets gained on improved sentiment across global equities, following a surprise moderation in UK inflation.

Among individual stocks, shares of ITC jumped 2.78 per cent and hit a fresh record high on a report that the company is likely to announce a demerger of its hotels business in August.

Dr Reddy's Laboratories gained 2 per cent after the US FDA concluded its inspection at the drug maker's facility in Andhra Pradesh with zero observations.