Nifty achieved a fresh all-time high on Friday, thanks to better-than-expected economic growth in the September-quarter, which has increased optimism regarding global interest rates. The NSE Nifty 50 index surged by 0.52% to reach 20,238.45, a new record high, while the S&P BSE Sensex rose by 0.44% to 67,286.16 as of 9.35 am.
During the September-quarter, the Indian economy expanded by 7.6%, surpassing the Reuters poll of economists’ forecast of 6.8% and the Reserve Bank of India’s estimate of 6.5%. This growth was primarily driven by the manufacturing sector.
Pramod Gubbi, the founder of Marcellus Investment Management, stated, “India’s growth outlook remains positive, with the government’s various capex initiatives likely to drive consumption at the bottom of the economic pyramid.”
Gubbi also added that the expectation of reaching the peak of the interest rate cycle in the United States has resulted in increased flows towards riskier assets, such as emerging equities, particularly in India.
In November, Nifty and Sensex experienced their best month in 2023, mainly due to the return of foreign portfolio investor (FPI) investments. FPIs added stocks worth 90 billion rupees ($1.1 billion), putting an end to their two-month selling streak.
Wall Street equity indexes increased overnight, with the Dow Jones Industrial Average recording its best month since October 2022. This was attributed to cooling consumer spending, which improved the rate outlook.
In the meantime, exit polls for state elections indicated a narrow advantage for the Bharatiya Janata Party in the critical states of Rajasthan and Madhya Pradesh, while the Congress party is leading in Chhattisgarh and Telangana.
“A decisive victory for the BJP will strengthen the consensus that the party is well-positioned for the 2024 general elections and is likely to lead to further market gains,” stated three analysts, with Madhavi Arora, the lead economist at Emkay Global Financial Services, leading the way.
India’s general elections are scheduled to take place early next year.
