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The benchmark Nifty50 soared to a fresh record high on both intraday and closing bases on Friday. This surge came on the back of a better-than-expected GDP growth figure for the September quarter of 2023-24 and was fuelled by growing global optimism that the US Federal Reserve and other large central banks have successfully reined in inflation and are on the verge of lowering interest rates.
The 50-share index rose by 135 points, or 0.67 per cent, to close at 20,268, surpassing its previous closing high of 20,192, recorded on September 15. It also hit an intraday high of 20,292, outdoing its previous record of 20,222.
The Sensex, on the other hand, rose by 493 points, or 0.74 per cent, to close at 67,481 — 358 points, or 0.53 per cent, below its record closing high of 67,839, also made on September 15.
The Nifty and the Sensex, logging their best week in five months, rose by 2.4 per cent and 2.3 per cent, respectively, amid strong buying support from both domestic and foreign investors. On Friday, foreign portfolio investors bought shares worth Rs 1,590 crore, while institutional investors pumped in Rs 1,448 crore.
The market’s latest gains came a day after the National Statistical Office released GDP numbers for Q2FY24.
During that quarter, the Indian economy expanded by 7.6 per cent, handsomely beating the Reserve Bank of India’s estimate of 6.5 per cent growth and the market’s 6.8 per cent forecast.
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According to economists, the strong showing in the September quarter sets the stage for robust growth ahead. “We expect real GDP to grow slightly more than 8 per cent year-on-year in the second half of FY24, taking FY24 real GDP growth to 7.9 per cent. Post-general election reforms will be transformative for employment and productivity, enabling a further acceleration to 8.4 per cent real GDP growth in FY25,” said a note by ICICI Securities.
Investors were also enthused as exit polls for the recently held state elections showed a narrow advantage for the Bharatiya Janata Party (BJP) in the key states of Rajasthan and Madhya Pradesh. Experts have said that a decisive win for the BJP in these states will raise hopes of political stability at the Centre.
Meanwhile, most global stocks rallied in November — with the MSCI All-Country World index soaring 9 per cent in what was its best month since three years — amid a sharp retreat in the US bond yields as traders mounted bets that the US interest rates have peaked and the Fed will begin cutting rates in the first half of 2024.
“The big rebound in shares has left stocks technically overbought and at risk of a further consolidation or short-term pull back. However, further gains are likely into year end and early next year as inflation continues to ease, the monetary policy environment turns progressively less threatening, economic indicators remain consistent with a soft landing, and geopolitical threats likely take a back seat for a while,” said Shane Oliver, head of investment strategy, AMP Investments.
The market cap of NSE-listed companies also finished above the $4 trillion mark on Friday at Rs 334.7 trillion ($4.02 trillion). The country’s largest bourse has relatively fewer companies listed on it compared to rival BSE, where the combined market cap of all listed companies crossed $4 trillion on Wednesday. The market value of BSE-listed companies finished at Rs 337.7 ($4.05 trillion).
The market breadth was favourable on Friday with 2,109 stocks advancing and only 1,638 declining. Shares of ITC were the biggest gainer on both Sensex and Nifty50. NTPC, Axis Bank, and L&T were the other prominent gainers, while Wipro was the biggest laggard.
Among sectoral indices, domestic-focused FMCG, Realty, and PSU Bank indices gained the most.
