Stock market today: Sensex, Nifty 50 hit record high; Why did the Indian stock market rise? – explained in 5 important factors

Nifty 50 opened at 22,614.10 against the previous close of 22,597.80 and rose 1.8% during the session to hit an all-time high of 22,993.60. The index closed 370 points (1.64%) higher at 22,967.65, with 44 stocks gaining.

The Sensex index opened at 74,253.53 against the previous day’s closing price of 74,221.06 and rose 1.7 per cent during the trading session to hit an all-time high of 75,499.91. The index rose 1,197 points (1.61%) to close at 75,418.04, with 27 stocks gaining.

During the session, the market witnessed across-the-board buying as BSE Midcap and Smallcap indices also hit new all-time highs of 43,442.47 and 48,229.33 respectively.

Also Read: Market Closing Highlights: Market closes at all-time high.Sensex rose at 75,420, Nifty rose at 22,970.

The total market capitalization of companies listed on the BSE is approximately ₹From 420 Lakhs Crores ₹4.16 million crores in the previous session, investors received approx. ₹4 billion yen in one day.

As many as 222 stocks, including Bharti Airtel, Mahindra & Mahindra, Ashok Leyland, Eicher Motors, Tata Steel, Adani Enterprises and Adani Ports, hit their fresh 52-week highs in intraday trade on the BSE.

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 boosted the Indian stock market today:

1. Ease election-related anxiety

Markets remain strong as election-related concerns fade. Investors are focusing on buying blue-chip stocks as the market expects political stability after the Lok Sabha elections and the medium- and long-term outlook for the market remains positive.

VK Vijayakumar, chief investment strategist at Geojit Financial Services, said: “The Nifty hitting a new record is a market message of political stability post-election, led by fairly well-valued large-cap stocks. “This increase is healthy,” he said.

Bernstein said the Indian stock market could see a short-term rally in the run-up to the Lok Sabha elections or in the week following the results, with the Nifty 50 potentially breaking the 23,000 mark. It is said that there is. However, profit taking may occur after this short-term rally.

Also Read: Lok Sabha Elections 2024: Nifty 50 could rise to 23,000, but will it last beyond that?Bernstein answers

2. Macro factors

Market sentiment appears to have accelerated after the Reserve Bank of India (RBI) announced record high interest rates. INRDividend of 2.11 Lakh Crores to Central Government in FY24. This will be positive for the economy as it will help the government meet 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.” INR“The Rs 2.11 lakh crore dividend from the Reserve Bank of India to the government will give the government an additional fiscal space of 0.3% of GDP. This means the government can reduce the fiscal deficit and step up infrastructure spending. We will,” said Mr. Vijayakumar.

“The stock market went wild after the Reserve Bank of India gave its approval today. INR“Dividend to government is Rs 2,100 crore. This indicates improved fiscal position and lower bond yields going forward. As a result of this positive development, we are seeing short covering activity in the market,” said Axis Securities. said Neeraj Chadhawar, Head of Fundamental and Quantitative Research.

The drop in crude oil prices will further boost market sentiment, especially for India, the world’s largest oil importer. Lower oil prices will help curb inflation and have a positive impact on the country’s fiscal health.

Also read: MK sees Brent crude oil price range of $83 to $92 per barrel in the short term

3. Profits of major banks

Stock prices of major banks such as HDFC Bank, ICICI Bank and Axis Bank are on the Sensex and Nifty 50 indices as India’s 10-year bond yield falls sharply after RBI pays a huge dividend to the government. contributed greatly to the rise in

“Bond yields have fallen significantly, reflecting lower government borrowing. Lower bond yields are positive for bank stocks,” said Mr. Vijayakumar.

The Nifty Bank index rose 2.06 per cent to close at 48,768.60 with all 12 stocks gaining.

4. Strong buying by domestic investors

Even as foreign institutional investors have been selling Indian stocks this month, domestic institutional investors (DIIs) have continued to be active buyers in the Indian market. Data shows DII bought Indian stocks INR38,331 crore in the cash section till May 22. On the other hand, FIIs INRCash earnings so far this month are $38.186 billion.

5. Technical factors

Soni Patnaik, assistant vice president, equity derivatives research, JM Financial Services, noted that the Nifty 50 could breach the key resistance level above 22,800 during weekly expiry today and move towards 23,000 levels from the current levels by the end of month expiry.

“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.

According to Ajit Mishra, senior vice president, research, Religare Broking, the Nifty 50 is eyeing the 23,100-23,400 zone and in case of pullback, the 22,600-22,800 zone is expected to serve as support.

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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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Published: May 23, 2024, 1:34 PM IST