The stock market rally was the most significant surge in the last two weeks and was led mainly by technology and financial stocks. Market sentiment was also boosted by comments from one.US Federal Reserve Officials are signaling the possibility of a rate cut as early as March. Both indices are now less than 1% away from their all-time highs recorded on September 15.
Yet another milestone was hit as the Indian equity market capitalization crossed the coveted mark of $4 trillion, with the total market capitalization of all BSE-listed stocks rising above Rs 333 lakh crore. This is the highest level ever Indian market, In the global market scenario, India’s stock market ranks fifth in market value, behind the US, China, Japan and Hong Kong.
BSE Sensex and Nifty 50 rally explained
IT companies, which largely depend on US revenues, rose 1.53% after Fed Governor Christopher Waller’s comments suggesting a possible interest rate cut in the coming months depending on the decline in inflation.
Indices covering financial sectors, including banks, financial services and private banks, each rose about 1.5%. Axis Bank and HDFC Bank are among the top gainers in the Nifty 50 with gains of 3.82% and 2% respectively.
Hero MotoCorp’s 3.45% surge boosted the auto index’s 1.63% rise, attributed to a rise in monthly two-wheeler sales on the back of improvement in rural demand.
Aishwarya Dadhich, founder of Fidient Asset Management, told Reuters that the surge in the Nifty 50 was due to a decline in US Treasury yields, which has resulted in fresh foreign inflows into Indian stocks.
According to Narendra Solanki, Head of Fundamental Research, Anand Rathi Shares and Stock Brokers, the market is in a healthy position and the broader markets are also participating. “In fact, mid- and small-cap stocks have outperformed their larger peers in the current rebound,” Solanki told TOI.
“On the inflows front we have seen FIIs come back strongly in the last weeks and have now turned positive for the month. “Domestic flows remain strong, providing a much-needed respite from global volatility.”
In terms of Sensex and Nifty outlook, he does not see any immediate short-term risks to the market. “The recent sharp decline in crude oil, if sustained, will be positive for the market. In the long term, the Indian economy and markets are currently in a good position and are poised to achieve even greater achievements further,” he expressed confidence.
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