Nifty, Sensex Resume Record Rally With Improved Macro Economic Situation

Indian benchmark indices once again touched a record high on Wednesday as the Nifty and Sensex crossed 20958.65 and 69701.40, respectively. At closing, the Sensex was up 357.59 points, or 0.52 percent, at 69,653.73, and the Nifty was up 82.60 points, or 0.40 percent, at 20,937.70. The indices had floated above the record mark on Tuesday as well.

Wipro, LTIMindtree, ITC, L&T, and TCS were the top gainers on the Nifty on Wednesday, while losers included Adani Enterprises, Eicher Motors, Cipla, NTPC, and UltraTech Cement. On the sectoral front, capital goods, FMCG, information technology, oil and gas, and power gained 1-2 percent, while banks and healthcare were down 0.5 percent each.

BSE midcap and smallcap indices ended with moderate gains. Experts attribute the rally to the BJP”s assembly election victory. According to Vinod Nair, Head of Research at Geojit Financial Services, investors expect policy continuity with the Narendra Modi-led NDA government”s re-election in 2024.

Moreover, foreign institutional investor (FII) reversal on the back of macroeconomic improvement played a crucial role. India and the US have witnessed decreased inflation and bond yields, which prompted FII to invest in India. Furthermore, the drop in crude prices has resulted in a reduction in inflation.

Other factors that influenced the market include the resilience of IT stocks, mitigated recession risks, the anticipation of increased summer demand, and the resurrection of the power sector.

However experts warn that profit booking is imminent.