Mumbai (Maharashtra) [India]: Indian stock markets closed on a high note on Thursday, fueled by expectations of policy rate cuts by the Reserve Bank of India (RBI), the formation of a BJP-led government in Maharashtra, and robust foreign institutional investor (FII) inflows.
Market Performance
- The Nifty 50 ended at 24,708.40, gaining 240.95 points or 0.98%.
- The BSE Sensex surged 809.53 points to close at 81,765.86, after hitting an intraday high of 82,317.74.
The rally was broad-based, with heavy buying in IT stocks, while PSU Banks and Realty were the only lagging sectors.
Sectoral Highlights
- The IT sector led the rally, gaining nearly 2% intraday. The Nifty IT index set a new record, surpassing the 45,000 mark with a daily high of 45,027.95.
- Top gainers included Titan, Trent, Dr. Reddy’s, and Bharti Airtel.
- Major losers were SBI Life, HDFC Life, Bajaj Auto, NTPC, and Grasim.
Market Drivers
- Rate Cut Expectations:
Investors anticipate that the RBI may announce policy rate cuts in its upcoming Monetary Policy Committee (MPC) meeting, supporting economic growth amid mixed global cues. - Political Stability:
The BJP’s successful formation of a government in Maharashtra has strengthened investor confidence in political stability and potential economic reforms. - FII Inflows:
FIIs were net buyers throughout the week, with inflows of Rs 1,797 crore on Wednesday alone, boosting large-cap stocks.
Expert Insights
- VLA Ambala, Co-founder of Stock Market Today, said:”The banking and financial services sector remains in focus amid expectations of a potential rate cut by the RBI. Jerome Powell’s remarks on the resilience of the US economy are also likely to have an indirect impact on India’s economic prospects.”
- Shriram Subramanian, Founder and MD of InGovern Research Services, remarked:”FII buying is particularly favourable for large-cap stocks. The year-end sentiment appears bullish, despite some economic indicators signalling a slowdown. Optimism around rate cuts and increased government spending is supporting market sentiment.”
- V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted:”Strength in banking stocks could propel the Bank Nifty to all-time highs, providing further impetus for Nifty to climb higher.”
Outlook
With strong FII interest, potential policy rate cuts, and a stable political environment, market sentiment remains positive. However, traders will closely watch the RBI’s monetary policy announcement on Friday for further direction.