Today, the domestic benchmark equity indices marked a fresh record high, buoyed by robust domestic macroeconomic data and the victorious outcome of key state elections by the ruling Bharatiya Janata Party (BJP).
As of 2:30 pm, the BSE Sensex soared by 1,266 points or 1.88%, reaching 68,748, while the Nifty50 traded at 20,654, up by 386 points or 1.91%.
During this rally, the market capitalization of all listed companies on BSE experienced a staggering increase of Rs 5.67 lakh crore, reaching Rs 343.35 lakh crore.
Leading the surge among Sensex constituents were SBI, ICICI Bank, L&T, NTPC, and Airtel, each recording gains of over 2%. Meanwhile, M&M, HDFC Bank, Bajaj Finance, and Axis Bank also commenced higher, with Nestle being the sole stock opening in the red.
Furthermore, Adani stocks witnessed a significant rally, with Adani Energy Solutions surging by 14%, and Adani Power and Adani Green Energy each witnessing a surge of over 12%. Adani Enterprises, Adani Total Gas, and Adani Wilmar also saw advances in the range of 6-8%.
Let’s delve into the primary factors fueling this remarkable rally:
- State Election Outcomes: The BJP’s resounding victory in major northern states has injected renewed optimism into the market. The decisive mandate has instilled confidence and optimism, signaling a favorable environment for market-friendly reforms.
- Asian Market Dynamics: While Asian shares presented a mixed picture, gains in South Korea and Australia propelled MSCI’s broadest index of Asia-Pacific shares outside Japan by 0.4%, contributing positively to market sentiment.
- US Bond Yields: Recent remarks by a US Federal Reserve official indicating potential interest rate cuts led to a decline in Treasury yields, bolstering market confidence. The two-year yield hit its lowest since mid-July, and the benchmark 10-year yield reached its lowest since September.
- FII Net Buying: Foreign institutional investors (FIIs) displayed confidence by net buying Indian shares worth Rs 1,589 crore on Friday, breaking a two-month selling streak. Their renewed interest reflects positively on the market sentiment.
- Crude Oil Price Stability: Despite geopolitical tensions in the Middle East, crude oil futures experienced a decline. Uncertainty surrounding OPEC+ voluntary output cuts and global fuel demand growth contributed to this outlook, positively impacting market sentiment.
- Rupee Strengthening: The Indian rupee appreciated to $83.27 against the US dollar, supported by a drop in US Treasury yields and the BJP’s victories in state elections. Additionally, Federal Reserve Chair Jerome Powell’s comments also influenced the currency’s movement.
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