MUMBAI: India’s equity market surged sharply on Thursday with the benchmark NSE Nifty reclaiming the 25,000 mark after seven months and BSE Sensex advancing 1,200 points. The fresh rally is primairy attributed to softening of inflation and easing trade tensions between India and the USA.
The BSE Sensex gained 1,200.18 points or 1.48% to settle the day at 82,530.74 while the Nifty settled above the 25,000 mark at 25,062.10, up by 395.20 points or 1.6 %. The two benchmarks have rallied about 4% each in the four sessions of this week.
“The bullish momentum was underpinned by a favorable shift in global cues and renewed optimism surrounding a potential India-US trade agreement. Additionally, a rally in rate-sensitive sectors on growing expectations of a rate cut, coupled with sustained foreign institutional investor (FII) inflows, added to the upside,” said analysts at Bajaj Broking Research.
Palka Arora Chopra, Director, Master Capital Services, said that the key catalyst to Thursday’s surge could be the moderation in inflation rates, which has strengthened market expectations of a potential rate cut by the RBI in the coming months, thereby boosting investor confidence. In addition, speculation about a possible early trading agreement between India and the United States has boosted market bullishness, especially among export-quality and globally traded sectors
Chopra added that this momentum is being aided by the continued inflow of foreign institutional investor (FII) funds, as many global investors returned to Indian stocks.
“Another part of the recent rally in the Indian markets was the lessening of India-Pakistan tension, which might have been an important contributor to uncertainty. On the whole, this slowing of downward pressure and uncertainty has fed opportunity and ultimately produced a broad-based rally across key indices,” stated Chopra.
Among the broader markets, Nifty Midcap100 and Nifty Smallcap100 indices settled with gains of 0.70% and 0.54%, respectively. Among the sectoral indices, Nifty Auto and Realty were the top gainers, ending higher by nearly 2% each. Nifty Metal, IT and Private Bank also surged.
Except for IndusInd Bank, all other 29 constituent stocks of the Sensex ended in the green.
Shares of defence-related firms continued to attract buyers' interest on Thursday, ending the day on a firm note. The stock of Sika Interplant Systems zoomed 9.26%, Astra Microwave Products surged 9.23%, Axiscades Technologies soared 5%, Taneja Aerospace & Aviation, which specialises in aerospace and aviation services, edged up 4.99%, and Data Patterns advanced 3.30%.
Paras Defence climbed 3.12%, Bharat Dynamics rallied 2.35%, Hindustan Aeronautics went up 2%, Bharat Electronics (1.74%) and Mishra Dhatu Nigam (1.55%) on the BSE.