In response to robust international indicators, the Indian stock market sustained its upward trajectory for the fourth consecutive day. The Nifty 50 index swiftly climbed back above the 22,000 threshold mere moments after trading commenced, while the Bank Nifty index swiftly surged past the 46,300 milestone, heralding a fresh breakout early in the session.
While the BSE Sensex maintained its position above the 73,000 mark, it also extended its prior gains with an intraday surge of approximately 0.50 percent on Friday. Despite this, the broader market witnessed small-cap and mid-cap indices outperforming the major benchmark indices, showcasing a distinct trend within the market landscape.
According to Sumeet Bagadia, Executive Director at Choice Broking, there is anticipation of a further rally in key benchmark indices. Bagadia stated, “The Bank Nifty index has recently experienced a fresh breakout at the 46,300 mark, displaying positive chart patterns. It is likely to reach levels between 46,800 and 46,900 in upcoming sessions. Additionally, breaching the 46,900 mark on a closing basis could unlock further upside potential towards the 47,800 level.” However, Bagadia cautioned that the Bank Nifty maintains a critical support level at the 45,900 mark, signaling a key level for market participants to monitor.
Bagadia highlighted that the Nifty 50 index is encountering resistance at the 21,125 level. Upon surpassing this barrier, the index could potentially ascend to the 22,300 mark. Nevertheless, he emphasized that the 21,800 level would serve as a significant support level for the key benchmark index.
Stock market experts assert that the Indian stock market’s ascent is underpinned by various factors, with positive global sentiments taking precedence. Additionally, the robust Indian economy, increased liquidity following better-than-expected inflation data in India, and strong US CPI data are cited as major contributors to the sustained rallies witnessed on Dalal Street.
Stock market experts listed the following 5 reasons for a continuous rally on Dalal Street:
- Strong Global Cues: Avinash Gorakshkar highlighted the impact of robust global cues on the Indian stock market rally. Following strong US Consumer Price Index (CPI) data, major global indices including Wall Street, Japanese Nikkei, and various Asian and European bourses surged, instigating buying interest in the Indian stock market.
- Indian Economic Performance: Gorakshkar emphasized the resilience of the Indian economy despite global inflation concerns. He noted that recent Indian inflation data reflects the nation’s economic strength. Investors are increasingly confident in the Indian market’s prospects, particularly as major index heavyweights have reported strong or in-line Q3 results, aligning with market estimates.
- FII Trade Pattern: Sandeep Pandey observed the trade pattern of Foreign Institutional Investors (FIIs), noting their shift from short-term to long-term positions. This transition indicates FIIs’ bullish stance on the Indian stock market in the medium to long term, contributing to the ongoing rally.
- Ample Liquidity Expectations: Pandey speculated on potential liquidity boosts following anticipated rate cuts from the Reserve Bank of India (RBI) in response to soft Indian inflation data. Lower interest rates are expected to increase liquidity in the market, potentially fueling further market activity.
- Participatory Rally Across Segments: Gorakshkar highlighted the participatory nature of the rally, emphasizing bottom fishing in Indian PSU and banking shares amidst recent sell-offs. Additionally, he noted the dominance of small-cap and mid-cap indices over key benchmark indices, indicating broad-based market participation and sustainability of the current rally.
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