On Friday, the Nifty 50 registered its longest-ever winning streak of 12 sessions, driven by solid support from domestic investors and growing optimism over possible rate cuts by the US Federal Reserve and other major global central banks. The Sensex also reflected this positive momentum, recording its ninth consecutive session of gains, the longest such streak since September 2023.
Both equity benchmark indices hit fresh record highs, both on the day and at the close. The Nifty 50 hit a fresh intraday high of 25,268.4 points before paring some gains to close at 25,235.9, up 84 points or 0.3 per cent. The Sensex ended the day at 82,366, up 231 points or 0.3 per cent.
For the week, the Sensex advanced 1.6%, while the Nifty 50 gained 1.7%. This ensured the third consecutive month of gains for both indices, with the Sensex up 0.8% and the Nifty up 1.1% in August (the 50-share index has appreciated 4.5% in the last 12 sessions).
Markets were boosted by strong buying by domestic institutional investors (DIIs), who acquired shares worth a net Rs 48,347 crore in August. Foreign portfolio investors (FPIs) were also net buyers, adding Rs 10,174 crore to their holdings.
On Friday alone, foreign investors purchased shares worth Rs 5,318 crore, while overseas investors sold shares worth Rs 3,198 crore. The inflows by foreign investors were partly attributed to the MSCI India Standard Index.
Investor sentiment was bolstered by gains in other global markets, driven by growing confidence in central bank rate cuts in developed economies. US macroeconomic data suggested that the Federal Reserve has managed to reduce inflation without tipping the economy into recession. The trajectory of future data is expected to support this view, with some market participants speculating that the Fed could implement a 50 basis point rate cut, followed by another similar reduction before the end of the year.
Inflation in the eurozone has also fallen to its lowest level since mid-2021, fuelling expectations of a rate cut by the European Central Bank in the coming weeks.
“Healthy inflows in the MSCI index led the indices to fresh highs. We expect the bullish market momentum to continue with equity-specific action driving gains. Global macroeconomic data, expected next week, will continue to weigh on domestic equities. Sector-wise, the auto industry will continue to be in focus as OEMs will release their monthly sales numbers,” said Siddhartha Khemka, Head – Retail Research at Motilal Oswal Financial Services.
Market breadth was positive, with 2,157 stocks up and 1,784 down on the Boston Stock Exchange. Sugar stocks rebounded after the government lifted restrictions on sugar factories, allowing them to use cane juice or syrup for ethanol production in November.
“The recent bullish trend in the market is largely attributed to global stability and renewed foreign capital inflows. We expect this positive sentiment to continue, with the Nifty 50 soon targeting the 25,500-point mark. The IT sector continues to show strength, while other sectors are seeing selective participation. In this environment, traders should focus on stock selection, prioritising those with relatively stronger performance,” said Ajit Mishra, Senior Vice President – Research, Religare Broking.
First published: August 30, 2024 | 19:57 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.