Stock Market Today: Indian stock markets witnessed strong buying interest on Thursday, May 23, with benchmarks Sensex and Nifty 50 hitting new highs.
The Nifty 50 opened at 22,614.10 against the previous day’s closing price of 22,597.80 and rose 1.6% during the trading session to reach an all-time high of 22,959.70.
The Sensex opened at 74,253.53 against the previous close of 74,221.06 and rose 1.6 per cent during the session to hit an intraday high of 75,407.39.
At around 2:35 pm, the Sensex index rose 1.30 per cent to 75,182 and the Nifty 50 index rose 1.33 per cent to 22,898. The Nifty Midcap Index and Small Cap Index 100 were up 0.30% and 0.05%, respectively, at that point.
Related article: Will Indian stock market continue to correct ahead of 2024 Lok Sabha election results? Experts list 28 stocks to buy
Experts point to five key factors that have boosted the Indian stock market today:
1. Ease election anxiety
Election-related fears are subsiding and the market remains in the green zone. Investors are focusing on buying blue-chip stocks as the market expects political stability after the Lok Sabha elections and the medium- to long-term market outlook remains positive.
“Nifty’s new all-time high is a message from the market of political stability post-election. It’s a healthy rally as well-valued large-cap stocks are leading the rally.” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
According to Bernstein, the Indian equity market may see a short-term rally before the Lok Sabha elections or in the week following the election results, with the Nifty 50 likely to breach the 23,000 mark. However, this short-term rally may be followed by profit-taking.
Also read: Lok Sabha elections 2024: Nifty 50 may rise to 23,000, but will it last long? Bernstein’s answer
2. Macro factors
Market sentiment appears to have picked up after the Reserve Bank of India (RBI) announced a record interest rate hike. ₹Dividend to the Centre for FY24 is Rs 2.11 billion, which will be a positive for the economy as it will help the government achieve its fiscal deficit target for FY25.
Also read: RBI’s record dividend INR$2.11 trillion to cover the central government’s fiscal deficit for FY2013 and help lower government bond yields
“The biggest positive for the market is the record.” ₹2.11 billion in dividends from RBI to the government will give the government additional fiscal space of 0.3% of GDP. This means the government can reduce the fiscal deficit and increase infrastructure spending,” Mr. Vijayakumar said.
Falling crude oil prices are a further boost to market sentiment, especially for India, one of the world’s largest oil importers. Lower crude oil prices will help contain inflation and have a positive impact on the country’s fiscal health.
Also read: MK expects Brent crude price range to be between $83 and $92 per barrel in the near term
3. Big bank profits
Big banking stocks such as HDFC Bank, ICICI Bank and Axis Bank emerged as top contributors to the rise in the Sensex and Nifty 50 indices after India’s 10-year bond yields fell sharply following the RBI’s huge dividend to the government.
“Bond yields have fallen sharply, reflecting reduced government borrowing. Lower bond yields are positive for bank stocks,” Mr. Vijayakumar said.
The Nifty Bank index rose nearly 2 per cent in intraday trade on Thursday.
4. Strong buying by domestic investors
Despite foreign institutional investors selling Indian equities this month, domestic institutional investors (DIIs) have continued to buy strongly in the Indian market, buying Indian equities worth $100 a share, data showed. ₹The cash segment stood at 38,331 crore till May 22. Meanwhile, FIIs sold a substantial amount of shares. ₹Cash earnings so far this month are $38.186 billion.
5. Technical factors
Soni Patnaik, Assistant Vice President, Equity Derivative Research, JM Financial Services He pointed out that there is a possibility that he will.
“Active writing of put options has been seen from a base of P22,500 to P22,800, which now forms a strong base of support at the P22,600/22,700 level,” Patnaik said.
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Disclaimer: The views and recommendations expressed are those of the individual analysts, experts and brokerage firms and not of Mint. You are advised to consult a qualified professional before making any investment decisions.
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