Sensex Rallies 1,200 Points, Nifty Hits Fresh High; Key Reasons For Friday’s Market Rally
Sensex soars by 1,000 points in a remarkable Friday rally, Nifty reaches an all-time high, reflecting positive market
Fabulous Friday on D-Street! Nifty, Sensex surged over 1% as the Street cheered faster-than-expected GDP print and US inflation data
BSE Sensex surged over 1,200 points to a fresh record high of 73,574. Its NSE counterpart Nifty50 also hit a new peak as it topped 22,300 mark for the first time in Friday’s trade. The market capitalisation of all listed companies on BSE increased by Rs 3.23 lakh crore to Rs 391.18 lakh crore.
Among the Sensex 30 shares, Tata Steel, Mahindra & Mahindra and JSW Steel were up nearly 2 per cent each. Tata Motors, Maruti, Larsen & Toubro and Power Grid were the other major gainers. On the flip side, Sun Pharma slipped 0.8 per cent.
In the broader market, the BSE MidCap index advanced 0.7 per cent, while the SmallCap surged 1 per cent.
Key Reasons for the Market Rally
Better Than Expected GDP Print
Indian economy grew 8.4 per cent in the October-December quarter, the fastest pace in six quarters and also above estimates, aided by robust manufacturing and construction activity, data showed post-market hours on Thursday.
“The main factor influencing the market today is likely to be the better-than-expected Q3 GDP growth number which has come at an impressive 8.4%. The impressive GDP numbers provide the fundamental support to the bull market,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Upbeat Global Markets
Positive global cues also helped indices move higher. Wall Street stock closed in the green overnight, with S&P 500 and Nasdaq Composite settling at record highs after in-line U.S. inflation reading kept intact the likelihood of a June interest rate cut.
Meanwhile in Asia, Japan’s Nikkei hit a fresh record high, buoyed by the bounce on Wall Street. China’s CSI 300 rose 0.2 percent after factory data and Hong Kong’s Hang Seng index also edged higher.
US Inflation Data
The in-line US inflation reading also aided market sentiment as it kept intact the likelihood of a rate cut in June by the Federal Reserve. Rate cuts mean more liquidity in the market and a possibility of the Fed reducing rates soon as boosted positivity among participants.
FIIs in buying mode
Foreign investors net bought shares worth Rs 3,568 crore in the previous session, while domestic institutional investors sold shares worth Rs 230 crore. In the month gone by, they bought Indian equities worth Rs 5,107 crore, after pulling over Rs 25,000 crore out of the domestic market. In the past decade, FIIs have turned out to be buyers of domestic stocks in March on eight occasions.
Nifty Technicals
As per the technical charts, the Nifty50 found support around the critical level of 21,850 levels. Analysts say a breach of this support level in the near-term could trigger a corrective move, especially if confirmed by a technical bearish pattern the Rising Wedge.
“Confirmation of this breakdown could see Nifty declining towards 21,700 – 21,625 levels. Hence, the upcoming sessions will be crucial in gauging how prices respond around the key support levels of 21900 – 21850. Additionally, the emergence of a fresh sell signal in the RSI Smoothened indicator, along with its average line, suggests a capped upside,” wrote Sameet Chavan, head of research, for technical and derivative research at Angel One.
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