Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators

Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators
Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators
Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators
Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators

Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators

Sensex and Nifty Scale New Heights Amidst Favorable Macroeconomic Indicators. Image/Unsplash

Record Highs for Benchmark Indices

Indian benchmark indices, Sensex and Nifty, achieved fresh record highs this week. The Nifty50 crossed the psychological 20,000-mark, buoyed by robust macroeconomic indicators. Factors contributing to this bullish trend include a lower consumer price index (CPI), optimism regarding demand in China, and hints of a rate hike pause by the US Federal Reserve.

Record-Breaking Closing Figures

On September 15, Sensex concluded at 67,838.63, a gain of 320 points or 0.47 percent, while Nifty closed at 20,192.35, rising by 89 points or 0.44 percent. Intraday, Sensex surged 408.23 points or 0.60 percent, setting a fresh all-time peak at 67,927.23.

Key Contributors to Gains

The rally was driven by banking, auto, and IT heavyweights, including HDFC Bank, TCS, and Mahindra and Mahindra. On a weekly basis, the BSE benchmark surged by 1,239.72 points or 1.86 percent, and Nifty climbed by 372.4 points or 1.87 percent. Market analysts attribute India’s impressive performance in September to several factors, including strong domestic fundamentals, the successful G20 Summit, positive global cues, and renewed foreign investor interest.

Bank Nifty’s Resilience

India’s banking sector played a pivotal role in this achievement, with a 4.3 percent rise in Bank Nifty. Given the 32 percent weightage of financials in Nifty, the strength of banking stocks contributes to Nifty’s resilience. Analysts note that banking stock valuations remain fair, which can provide support to the market, even as overall market valuations gradually rise.

Broader Market Trends

While small-cap and mid-cap stocks experienced a three-week winning streak, they faced pressure this week. The BSE small cap and mid cap indices declined by 1 percent and 0.5 percent, respectively, while the BSE large-cap index added 1.7 percent. Factors such as concerns of overvaluation after reaching all-time highs led to profit booking in mid-cap and small-cap segments.

Market Outlook

Market observers anticipate that Nifty will maintain its positive momentum, especially in the large-cap sector. Sectoral rotation may be observed in the broader market. The upcoming US interest rate decision is closely watched, with expectations of a Fed pause, which could provide relief to global markets. Additionally, lower CPI and wholesale inflation in India are seen as comforting amidst the global inflationary scenario.

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