MUMBAI: The ongoing bullish trend in the Indian equity market following the formation of the BJP-led coalition government at the center continues to propel the benchmarks – BSE Sensex and NSE Nifty50 – to new highs.
In just two sessions, the 30-share index Sensex surged from 78,000 points to 79,000 points, while the broader Nifty50 breached the 24,000 level for the first time on Thursday.
Since the low observed on June 4 during the general election results, both Sensex and Nifty have rallied by 10% each.
The Sensex has surged by more than 7,100 points during this period, while the Nifty has gained 2,160 points. On June 4, both benchmarks experienced a correction of over 6%, which was fully recovered in just three sessions.
"This has likely been one of the fastest recoveries in the history of Indian capital markets, largely driven by fund flows. Market participants have been aggressively buying equities over the past fortnight, propelling the markets higher," said Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities.
Data from SEBI regarding foreign portfolio investors (FPIs) show that they have been net buyers over the last 12 sessions from June 10 to June 26, injecting approximately Rs 32,087 crore. Domestic institutional investors (DIIs) have also contributed positively, pumping in Rs 20,002 crore during the same period.
Jaykrishna Gandhi, Head of Business Development, Institutional Equities at Emkay Global Financial Services, noted that the recent uptrend is supported by the private banking sector, which has been a laggard in the past eight quarters but remains favored by foreign investors.
"We expect the positive momentum to continue into July, bolstered by expectations of a reformative budget that will drive economic growth and sustained inflows from both domestic and foreign investors. Large-cap stocks with attractive valuations and emerging sectors entering the capital markets will be closely watched," added Gandhi.
In Thursday’s trading session, the Sensex concluded 568.93 points higher at 79,243.18, while the NSE Nifty50 climbed 175.70 points to settle at 24,044.50. The IT sector led the gains with the Nifty IT index rising over 2%. Cement stocks also saw significant buying interest amidst sectoral consolidation. However, small-cap and mid-cap stocks faced pressure due to concerns over valuations. Out of 4,008 stocks listed on the BSE, 1,510 closed higher, 2,388 ended lower, and 110 remained unchanged.