On Wednesday, the Nifty 50 index reached a new peak by closing higher for the tenth consecutive session, marking its longest winning streak since September-October 2020. The benchmark index peaked at 25,130 during the session before settling at 25,052, reflecting a gain of 35 points or 0.14%. This notable performance highlights a strong rally, driven by institutional investor support and positive sentiment regarding a potential rate cut by the US Federal Reserve.
Market Overview
The Sensex also recorded gains, adding 74 points to close at 81,786, a 0.09% increase. The total market capitalization of BSE-listed stocks surged by Rs 85,000 crore, reaching a record high of Rs 463 trillion. This rise in market cap reflects robust investor confidence and market dynamics.
Institutional and Foreign Investment Trends
Domestic institutional investors (DIIs) have played a crucial role in supporting the market, with net purchases amounting to Rs 48,347 crore so far this month. In contrast, foreign portfolio investors (FPIs) have reduced their selling activity, emerging as net sellers of Rs 3,805 crore. The ongoing support from domestic investors has been instrumental in maintaining market momentum despite global uncertainties.
Impact of US Federal Reserve’s Dovish Stance
Investor optimism has been further buoyed by expectations of a rate cut from the US Federal Reserve, following a dovish speech by Fed Chair Jerome Powell at the Jackson Hole symposium. This anticipation has contributed to the positive sentiment in the Indian markets. However, elevated valuations have tempered the extent of gains, with some investors remaining cautious.
Sector Performance and Investor Sentiment
The market breadth was mixed, with 2,147 stocks declining and 1,815 advancing. Infosys, which saw a 2.1% increase, was a significant contributor to the Sensex’s gains. IT and pharma stocks, in particular, have been favored by investors, given their defensive characteristics and potential benefits from a rate cut in the US.
Vinod Nair, head of research at Geojit Financial Services, noted that while elevated valuations present a near-term challenge, investors are focusing on defensive bets. He also highlighted that upcoming macroeconomic data, including India’s Q1FY25 GDP figures, will be closely watched for further market direction.
Looking Ahead
As investors await further macro data from the US and Eurozone, attention will be on how these economic indicators may influence market movements. The potential rate cut by the Federal Reserve and the performance of IT companies with significant US revenue exposure will likely continue to shape market sentiment in the near term.
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