The Indian stock market has been riding a bullish wave, with benchmark indices Sensex and Nifty reaching fresh all-time highs during early trading on Friday. This surge is largely attributed to strong trends in Asian markets and renewed foreign fund inflows, which have bolstered confidence in investing in the stock market.
The 30-share BSE Sensex soared 502.42 points, setting a new record of 82,637.03 in early trade. Meanwhile, the NSE Nifty climbed 105.7 points, reaching an unprecedented peak of 25,257.65. The rally was driven by gains in several key stocks, including Bajaj Finserv, HDFC Bank, Titan, Bajaj Finance, NTPC, Power Grid, Asian Paints, and HCL Technologies.
Among the top performers on the Sensex, Bajaj Finserv and HDFC Bank led the pack, contributing significantly to the index's rise. Other notable gainers included Titan, Bajaj Finance, NTPC, Power Grid, Asian Paints, and HCL Technologies. However, not all stocks shared in the market's euphoria. Tata Motors and Sun Pharma were among the laggards, facing headwinds that limited their gains.
The bullish sentiment in the Indian market was echoed across Asian markets, with Seoul, Tokyo, Shanghai, and Hong Kong all trading in positive territory. This widespread optimism has further reinforced the attractiveness of investing in the stock market, particularly in emerging markets like India.
The ongoing rally in the Indian stock market has been supported by substantial inflows from both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). On Thursday, FIIs purchased equities worth Rs 3,259.56 crore, while DIIs bought equities worth Rs 2,690.85 crore. This influx of capital has played a crucial role in driving the market to new heights, making investing in the stock market an appealing option for both domestic and international investors.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the accumulation of quality large-cap stocks by DIIs and High Net Worth Individuals (HNIs), along with reduced selling and selective buying by FIIs, has contributed to the market's resilience. This trend of steady accumulation suggests a strong foundation for future gains in the stock market.
The global market landscape has also influenced the bullish rally in India. The US markets ended on a mixed note on Thursday, but positive cues from Asian markets helped sustain the momentum in India. Additionally, the global oil benchmark Brent crude saw a slight increase, climbing 0.23% to USD 80.12 per barrel, reflecting stable commodity markets that further support investing in the stock market.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, pointed out that key catalysts for the market's rally include substantial FII buying, positive global cues, and upbeat US GDP data. These factors have collectively contributed to the optimism surrounding investing in the stock market, particularly in India, where the market has shown remarkable resilience.
The Indian stock market has demonstrated resilience, with the Sensex and Nifty both closing at record highs on Thursday. The BSE Sensex rose by 349.05 points, closing at 82,134.61, while the Nifty gained 99.60 points, settling at 25,151.95. This marked the eighth consecutive day of gains for the Sensex and the eleventh for the Nifty, showcasing the sustained strength of the market.
Despite some profit-booking earlier, the broader market quickly rebounded, with mid-cap and small-cap indices outperforming the headline indices. Analysts have noted that while valuations may appear stretched, the consistent performance of these indices indicates a continued appetite for investing in the stock market.
V K Vijayakumar of Geojit Financial Services noted the decline in the India VIX, a key indicator of market volatility, which has eased to hover below 14 levels. The reduced volatility, coupled with steady buying from DIIs and HNIs, has helped maintain the market's upward momentum, making investing in the stock market an increasingly attractive proposition.
Looking ahead, analysts suggest that if banking stocks see significant buying, the market could experience a further breakout. However, ongoing challenges such as deposit struggles and margin pressure may temper demand in the near term. Nonetheless, the current outperformance of large caps over the broader market is a positive sign for investors.
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