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Sensex, Nifty at a lifetime high: What's behind the share markets rally?
Sensex, Nifty at all-time high: Benchmark equity indices hit their lifetime high levels on Friday. What are the reasons behind the rally?
Sensex, Nifty rise: Indian stock market indices surged to new highs, with the Nifty 50 reaching a record level of 19,201.70 and the S&P BSE Sensex settling at a fresh peak of 64,718.56. Due to the rally in equities, the market capitalisation (mcap) of BSE-listed companies jumped to ₹295.72 lakh crore, setting a lifetime high. (Sensex, Nifty all updates)
The benchmark had its strongest week in over 11 months, and advances extended for the fourth month in a row. But what is fuelling the share markets' rise? Here are some reasons:
US positive economic winds propel Indian stock markets
One of the major reasons for India's benchmark indices reaching new record highs is due to the boost in the performance of information technology (IT) stocks.
Twelve of the 13 major sector indices logged gains, with the IT index rising over 2% each. Infosys jumped over 3%.
The IT industry heavily relies on clients from the United States, so the positive release of strong economic data from the world's largest economy has eased concerns about a slowdown and improved the overall market sentiment.
US' favourable economic indicators like increased first-quarter GDP, decreased jobless claims, and successful stress tests conducted by the Federal Reserve have reduced economy slowdown worries, boosting the markets.
Auto stocks boosting the rise
The automotive sector reached new record highs, with a rise of over 2%.
Auto stocks such as Mahindra & Mahindra, Hero MotoCorp, and Maruti Suzuki emerged as top gainers among the Nifty 50 companies, ahead of the release of June sales data.
Domestic market strengthened the sentiments
Strong foreign inflows, controlled inflation, and consistent growth in corporate earnings have further boosted confidence in the Indian equities market.
Positive macroeconomic fundamentals have attracted inflows totalling more than $3.5 billion.
This has also helped the rupee strengthen, the strongest since January, as it closed the day at 82.0375 per dollar, up from 82.0550 the previous session.
(Inputs from wires)
