Stock Market Today: The Indian equity market’s main indices, Sensex and Nifty 50, hit fresh record highs during trade on Thursday, June 13, supported by healthy macroeconomic data, boosting optimism about the strength of India’s economic growth prospects in the medium to long term.
During trade, the Sensex index hit a fresh record high of 77,145.46 while the Nifty 50 index recorded a fresh high of 23,481.05.
Finally, the Sensex index closed at 76,810.90, up 204 points or 0.27 percent, while the Nifty 50 index closed at 23,398.90, up 76 points or 0.33 percent, thus closing at fresh record highs.
The market witnessed gains across all segments with second-tier indices BSE Midcap and BSE Smallcap also hitting fresh all-time highs of 45,576.53 and 50,707.92 respectively on Thursday.
The BSE midcap index finally ended at 45,521.86, up 0.79 per cent, while the smallcap index ended at 50,678.94, up 0.89 per cent.
The total market capitalization of all companies listed on the BSE is approximately ₹From nearly 43.17 crore. ₹42.93 crore in the previous session, while investors have invested around ₹2.4 lakh crores per session.
Around 300 stocks including Bharti Airtel, Tata Steel, Cipla, Divis Labs, TVS Motor, Varun Beverages and UltraTech Cement hit their fresh 52-week highs in intraday trade on the BSE.
The Nifty 50 has been hitting fresh record highs this week following the election results and the formation of the BJP-led NDA government.
Let’s look at five key factors underpinning market sentiment.
1. Sustained inflation relief
India’s Consumer Price Index (CPI) based inflation, also known as retail inflation, fell to its lowest level in the last 12 months, to 4.75% in May. India’s retail inflation has remained below 5% since March. Experts are of the view that retail inflation is gradually approaching the RBI’s target level of 4%. However, food inflation remains a concern.
Related article: Retail inflation eases, factory output rises slightly in May, boosting Indian economy
In the United States, inflation also eased more than expected. The U.S. Consumer Price Index (CPI) rose 0.1 percentage point to 3.3% year-on-year in May from 3.4% in April. Monthly inflation was stable at 0%, down from 0.3% in April. Economists surveyed by Reuters had expected the CPI to rise 0.1% in May.
“Domestic equity indices traded with marginal gains and domestic CPI data indicates a gradual downward trend in inflation. A similar trend was reported in the US CPI as well, leading to market expectations being lowered from two rate cuts to one in FY24, creating mixed effects for global markets,” said Vinod Nair, head of research at Geojit Financial Services.
2. Expectations for policy continuity
The Nifty 50 index has been on a record high rally since the BJP-led NDA government came to power. This upward trend is fuelled by hopes that the new government will be able to ensure political stability and policy continuity. The BJP has signalled its intention to continue with policy reforms by leaving key ministries unchanged.
“The new cabinet formation signals a significant continuity in the policies of the BJP-led NDA government. All the key ministries are with the BJP,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Experts expect the government to maintain fiscal prudence. They expect the next budget to further outline plans to boost infrastructure and capital expenditure-led projects.
Also Read: Nifty 50 hits new high: Can it reach 24,000 by Union Budget 2024?
(To be continued)
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Published: June 13, 2024 3:33 PM IST
