After India’s economy stunned investors by growing at a higher rate than predicted in the December quarter, benchmark indices shot to all-time highs on Friday, with large cap companies driving the majority of the increase.
Banks, capital goods, and oil and gas stocks drove the Sensex to 73,819.21 on Friday, and the Nifty index to a record high of 22,353.30 points. According to BSE data, the driving forces behind this were the purchases of ₹618.58 crore by proprietary traders and ₹3,814.53 crore by preliminary domestic institutional investors.
Shares valued at a net of ₹128.94 crore were bought by foreign portfolio investors.
The actual rise in investor wealth was ₹4.37 trillion.
“The impressive GDP numbers provide the ammunition to the bulls to catapult Indian indices to all-time highs,” said Devarsh Vakil, deputy head, retail research, at HDFC Securities, underscoring the bullishness on the Street. “The next upside targets to be watched are around 22,500-22,600 levels. Immediate support is at 22,200 levels.”
India’s GDP grew by 8.4% in the December quarter, nearly twice as quickly as the 4.3% growth rate seen in the third quarter of FY23 and far faster than the 6.6% median growth predicted in a Mint survey of 17 experts. The statistics ministry predicted on Thursday that India’s GDP will expand by 7.6% in FY24, which is faster than the RBI’s forecast of 7%.
At 22,338.75 points at the end of Friday’s trading, the Nifty saw its biggest percentage increase in six months. At 73,745.35 points, the Sensex rose 1.72%, the highest level in more than a month.
The top five stocks—ICICI Bank Ltd., Reliance Industries Ltd., HDFC Bank Ltd., Larsen & Toubro Ltd., and State Bank of India—contributed about three-fifths of the Nifty’s 355.95-point surge.
Reliance Industries (₹3,000 per share), ICICI Bank (₹1,089.95), Tata Motors (₹980.4), and Adani Ports (₹1,349) were among the stocks that soared to new all-time highs. The Nifty Metal index surged 3.62%, while the Bank Nifty gained 2.53%, making them the largest sectoral gainers.
“The momentum in the market could continue, led by large private banks which have been lagging since the past few months,” stated Andrew Holland, chief executive officer at Avendus Capital Public Markets Alternate Strategies.
“Markets would keep a close watch on the 10-year government bond yield declining below 7%, which would be a precursor to an earlier-than-expected rate cut by RBI,” Holland added.
“The markets will start discounting this and the biggest beneficiaries would be the large private banks, which have missed the rally so far. FPIs could resume purchases of some of the large names, which, in turn, could sustain the momentum in the Nifty and Sensex, where financials enjoy the highest weightage,” he continued.
The Nifty is weighed by financial services equities (32.48%), IT stocks (14.46%), and oil and gas industries (12.99%).
