Indian Stock Market Hits Fresh Record Highs on Optimism About Economic Growth Outlook
The Indian stock market’s frontline indices, the Sensex and the Nifty 50, soared to new record highs on Thursday, June 13, driven by positive macroeconomic indicators that have fueled optimism about India’s economic growth prospects in the medium to long term.
During the trading session, the Sensex reached a new peak of 77,145.46, while the Nifty 50 climbed to a fresh high of 23,481.05. By the end of the day, the Sensex closed at 76,810.90, up 204 points, or 0.27%, while the Nifty 50 settled at 23,398.90, up 76 points, or 0.33%. Both indices closed at their highest levels ever.
The market saw gains across various sectors, with the BSE Midcap and BSE Smallcap indices also hitting new record highs of 45,576.53 and 50,707.92, respectively. The BSE Midcap index closed 0.79% higher at 45,521.86, while the Smallcap index ended with a gain of 0.89% at 50,678.94.
The total market capitalization of BSE-listed companies rose to nearly ₹431.7 lakh crore from ₹429.3 lakh crore in the previous session, resulting in investors gaining approximately ₹2.4 lakh crore in a single day.
Several stocks, including Bharti Airtel, Tata Steel, Cipla, Divi’s Labs, TVS Motor, Varun Beverages, and UltraTech Cement, hit their 52-week highs during the trading session.
The recent record highs in the Nifty 50 come after the outcome of the elections and the formation of the BJP-led NDA government. Five key factors are driving the positive sentiment in the market:
1. Inflation Easing Sustainably: Retail inflation in India fell to 4.75% in May, the lowest level in the last 12 months, indicating a slow decline towards the RBI’s 4% target. In the US, inflation also eased more than expected, providing a positive outlook for the markets.
2. Expectations of Policy Continuity: The market is optimistic about policy reforms and continuity under the new government, which has signaled its commitment to maintaining stability and implementing key reforms.
3. Rate Cut Hopes: With inflation cooling off, experts expect rate cuts by the RBI in October and potentially one rate cut in the US by the end of the year.
4. Prospects of Above-Normal Monsoon: The IMD’s prediction of an above-normal monsoon is expected to ease inflationary pressures and support economic growth in India.
5. Technical Factors: Analysts suggest that the Nifty 50 is consolidating within a range and could see a breakout soon, with potential for a trending move.
Overall, the market sentiment remains positive, driven by a combination of macroeconomic factors and technical indicators. Investors are advised to consult with experts before making investment decisions.
