Nifty Reaches Record High Following Positive Growth Data, Sensex Surges by 300 Points
On Friday, the Nifty reached a new all-time high, boosted by the faster-than-anticipated economic growth in the September-quarter, which added to the positive outlook on global interest rates.
The NSE Nifty 50 index surged by 0.52% to 20,238.45, setting a fresh record, while the S&P BSE Sensex gained 0.44% to reach 67,286.16 by 9.35 am.
In the September-quarter, the Indian economy expanded by 7.6%, surpassing the 6.8% forecast in a Reuters survey of economists and the 6.5% estimate from the Reserve Bank of India, driven by growth in manufacturing.
“India’s growth prospects remain optimistic, as the government’s various capital expenditure initiatives are expected to stimulate consumption among the lower-income groups,” noted Pramod Gubbi, the founder of Marcellus Investment Management.
Gubbi further stated that the belief that the US interest rate cycle has peaked has led to a shift in investment flows towards riskier assets like emerging market equities, particularly in India.
November was the most successful month of 2023 for both the Nifty and Sensex, supported by the resurgence of foreign portfolio investor (FPI) inflows.
In November, FPIs broke a two-month streak of selling by injecting 90 billion rupees ($1.1 billion) into Indian stocks.
Overnight, Wall Street indices climbed, with the Dow Jones Industrial Average recording its best month since October 2022, following data indicating a slowdown in consumer spending that boosted the rate projection.
Additionally, exit polls for state elections suggested a slight advantage for the Bharatiya Janata Party in the crucial states of Rajasthan and Madhya Pradesh, while the Congress party appeared to be leading in Chhattisgarh and Telangana.
“A clear victory for the BJP will confirm the consensus that the party is in a strong position for the 2024 general elections and is likely to fuel another market rally,” stated a team of analysts led by Madhavi Arora, the lead economist at Emkay Global Financial Services.
India’s general elections are scheduled for early next year.