Benchmark stock market indices gained sharply on Thursday, with the S&P BSE Sensex and NSE Nifty rising over 1% each during the intraday trading session.
The Sensex briefly surged over 800 points higher while Nifty50 topped the 22,350 mark on the final trading session of FY24.
At around 12.01 pm, Sensex was up 0.92% to 73,662.90, while the Nifty50 traded 0.96% higher at 22,336.90.
Several factors influenced today’s bull run on Dalal Street, including positive global cues and gains in financial stocks.
It may be noted that the combined market capitalisation of all listed stocks on the BSE stood at Rs 383.64 lakh crore.
Positive global cues
It may be noted that Wall Street stocks closed higher in anticipation of a crucial inflation report scheduled later in the week. The Dow Jones Industrial Average surged by 1.22%, the S&P 500 climbed by 0.86%, and the Nasdaq Composite rose by 0.51%.
Meanwhile, Asian markets displayed a mixed performance on Thursday. Chinese stocks rebounded from previous losses, with Hong Kong’s Hang Seng index rising by 1.1% to 16,579.99 and the Shanghai Composite advancing by 1.2% to 3,029.01.
Australia’s S&P/ASX 200 also experienced a notable increase, jumping by 0.9% to 7,887.00. However, Taiwan’s Taiex remained relatively unchanged. However, Japan’s Nikkei 225 faced a decline, losing 1.2% to settle at 40,283.44.
The prevailing optimism in global cues played a big role in driving today’s bullish momentum on Dalal Street, alongside the surge in financial sector stocks.
US Fed’s dovish commentary
While there are concerns over US inflation data, the recent dovish commentary from the US Federal Reserve has provided some support to stock markets around the world.
The US central bank maintained its projection of three rate cuts for the year. Presently, markets anticipate a rate cut in June, though the timing could be swayed by Friday’s inflation figures.
Strong global cues
Wall Street equities closed higher overnight, ahead of a key inflation reading later this week. The Dow Jones Industrial Average rose 1.22%, the S&P 500 gained 0.86% and the Nasdaq Composite gained 0.51%.
Asian shares were mixed on Thursday. Chinese markets recouped losses from the day before. Hong Kong’s Hang Seng index gained 1.1% to 16,579.99, while the Shanghai Composite advanced 1.2% to 3,029.01. Australia’s S&P/ASX 200 jumped 0.9% to 7,887.00. Taiwan’s Taiex was little changed. In Tokyo, the Nikkei 225 lost 1.2% to 40,283.44.
Banks and financial stocks gain
The gains on Dalal Street were also driven by a rally in banking and financial services stocks. The Nifty Bank index gained nearly 1%, while Nifty Financial Services rose more than 1%.
Financial stocks gained momentum following the relaxation of recently tightened regulations by the central bank regarding lenders’ investments in alternative investment funds (AIFs).
On Wednesday, the RBI eased regulations introduced in December, which required lenders to allocate higher provisions if they invested in alternative investment funds (AIFs) that subsequently invested in the lender’s borrowers.
Reacting to the development, heavyweight stocks Bajaj Finance and Bajaj Finserv both surged by approximately 4%. Additionally, news reports indicated that housing finance arm Bajaj Housing Finance had commenced preliminary discussions with several investment banks regarding a potential initial public offering, contributing to the rise in stock prices.
ICICI Bank and State Bank of India were among the top ten gainers on the Nifty 50, with gains of 1.6% and 1.9%, respectively.
FII inflows gain momentum
Another factor behind the positive momentum in the domestic stock markets is strong interest from foreign institutional investors (FIIs). FIIs bought shares worth Rs 2,170 crore on a net basis in the previous trading session, while domestic institutional investors purchased net-bought stocks worth Rs 1,198 crore.
GDP upgrades from S&P and Morgan Stanley
S&P Global recently raised its forecast for India’s GDP growth in FY25 by 40 basis points to 6.8%. Morgan Stanley has also increased its GDP growth projection for FY25 to 6.8%.
Morgan Stanley has adjusted its GDP growth forecast for fiscal year 2025 to 6.8%, up from the previous estimate of 6.5%.
They also anticipate growth of 7.9% for fiscal year 2024.
“The current economic cycle is characterized by strength and stability, with a favorable macro-stability outlook. Although a modest easing cycle may be on the horizon, we remain vigilant regarding the potential for stronger-than-expected growth,” said Morgan Stanley.
Source Agencies
