Sensex and Nifty 50 Reach New Highs After RBI Increases GDP Growth Forecast
In a surprising turn of events, the domestic benchmark indices, the Sensex and Nifty 50, soared over 2% to reach new record highs on Friday. This surge came after the Reserve Bank of India (RBI) revised its GDP growth forecast for 2024-25 to 7.2% from the previous estimate of 7%.
During day trading, the 30-share BSE Sensex jumped 1,720.8 points, or 2.29%, to hit a new all-time high of 76,795.31. The index closed at a record high of 76,693.36, marking a significant increase of 1,618.85 points, or 2.16%.
Similarly, the NSE Nifty witnessed a substantial rise of 498.8 points, or 2.18%, reaching 23,320.20 throughout the day. Although it fell just short of the record intraday high by 18.5 points, the index closed at an unprecedented level of 23,290.15, up 468.75 points (2.05%).
Vinod Nair, Head of Research at Geojit Financial Services, attributed the broad-based rally in the domestic market to the expectation of political stability at the center and the RBI’s upward revision of the FY25 growth forecast to 7.2%. Investors were buoyed by this news, propelling the Indian market to surpass its previous record high set on exit poll day.
Meanwhile, in the global market, the US labor market outperformed expectations in May by adding 272,000 non-farm payroll positions, well above the projected 180,000. This unexpected positive data may delay the Federal Reserve from lowering interest rates, leading to a decline in the market and a strengthening of the dollar, according to market experts.
Looking ahead, the market outlook will be influenced by key domestic and global economic indicators. Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, highlighted that next week’s market direction will be guided by various factors such as India WPI inflation, China CPI inflation, UK GDP data, US core CPI and CPI data, US PPI data, and the US Fed’s interest rate decision.
In conclusion, the market sentiment remains positive, with experts like Dharmesh Shah, Vice President of ICICI Securities, predicting further upside potential for the Nifty 50. The index’s recent recovery and strong technical indicators suggest a bullish trend, with support levels identified for potential buying opportunities.
As investors navigate through these volatile times, it is essential to stay informed and seek advice from certified experts before making any investment decisions.
