The Indian stock market witnessed a notable surge in its benchmarks, Nifty 50 and Sensex, on Thursday, March 21, propelled by a variety of factors. Here are five critical reasons behind today’s gains:
- Fed’s Signal on Rate Cuts: Following the US Federal Reserve’s decision to leave benchmark interest rates unchanged and hint at the possibility of three rate cuts this year, market sentiment saw a boost. Investors sought clarity on the direction of interest rate adjustments, and the Fed’s stance provided a positive outlook, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
- Positive Global Cues: Global indicators, particularly major Asian indices like Korea’s KOSPI and Japan’s Nikkei, surged by 2 percent, influenced by the US Federal Reserve’s reaffirmation of its intention to proceed with interest rate cuts.
- Across-the-Board Buying: Intraday trading on Thursday saw buying across almost all sectoral indices. Notably, Nifty Bank rose over 1 percent, while sectoral indices such as PSU banks and metal on the NSE witnessed gains of over 2 percent each. Additionally, more than 80 stocks, including Bharti Airtel, Maruti Suzuki, CG Power DMart, and Thermax, hit fresh 52-week highs on the BSE.
- Growing Influence of Domestic Investors: Experts have observed a growing influence of domestic institutional investors (DIIs) as a significant driving force behind the market’s recent resilience. According to Vijayakumar, this trend may persist, especially if foreign institutional investors (FIIs) continue to sell, potentially prompting them to slow down their selling and even become buyers, particularly in large-cap sectors like banking, telecom, capital goods, and automobiles.
- Technical Factors: Analysts like Prashanth Tapse, Senior VP (Research) at Mehta Equities, and Sameet Chavan, Head of Research – Technical and Derivative at Angel One, point towards technical factors supporting Nifty’s potential gains. Tapse suggests immediate targets of 22,000 and 22,527 for Nifty, with limited downside risks. Chavan adds technical analysis, indicating potential resistance and support levels for Nifty around 22,000 and between 21,550-21,500 respectively.
Disclaimer: The views, forecasts, and recommendations provided above are based on individual analysts, experts and do not necessarily reflect the opinions of FINTAXBYTES . Investors are strongly advised to consult certified experts and conduct thorough research before making any investment decisions.
