India Today Headline

The Nifty Hits New High, Sensex Rallies 1,000 Points: The Main Drivers Of Friday’s Market Rally

<p>The BSE Sensex increased by more over 1,000 points, hitting a new high of 73,574. When the Nifty50, the index for the NSE, crossed the 22,300 barrier for the first time on Friday, it too reached a new high. All BSE-listed businesses now have a market capitalization of Rs 391.18 lakh crore, a growth of Rs 3.23 lakh crore.</p>
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<p>Tata Steel, Mahindra & Mahindra, and JSW Steel all saw gains of around 2% among the Sensex 30 equities. The other big winners were Power Grid, Larsen & Toubro, Maruti, Tata Motors, and Maruti. Conversely, Sun Pharma had a 0.8% decline.</p>
<p>The BSE MidCap index gained 0.7% in the overall market, while the SmallCap index increased by 1%.</p>
<p>Principal Causes of the Market Rally</p>
<p><strong>Better GDP Print Than Anticipated</strong></p>
<p>According to figures released after market hours on Thursday, the Indian economy expanded 8.4% in the October–December quarter—the quickest rate in six quarters and also beyond projections—thanks to strong manufacturing and construction activity.</p>
<p>The Q3 GDP growth figure, which came in at an amazing 8.4%, was stronger than predicted, and this is probably what is driving the market today. The bull market is fundamentally supported by the excellent GDP figures, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.</p>
<p><strong>Positive International Markets</strong></p>
<p>Positive global signals contributed to the indexes’ upward movement. A June interest rate decrease is still likely, as seen by the S&P 500 and Nasdaq Composite closing at all-time highs. Wall Street stocks finished higher overnight.</p>
<p>Concurrently, in Asia, the Nikkei of Japan achieved a new high, driven by the recovery on Wall Street. In response to manufacturing statistics, Hong Kong’s Hang Seng index and China’s CSI 300 both saw slight increases.</p>
<p><strong>US Inflation Statistics</strong></p>
<p>The prospect of a rate drop by the Federal Reserve in June was maintained by the in-line US inflation figure, which further improved market mood. Rate reduction have increased market liquidity, raised participant optimism, and increased the likelihood that the Fed will decrease rates soon.</p>
<p><strong>FIIs are in the purchasing phase.</strong></p>
<p>In the previous session, domestic institutional investors sold shares worth Rs 230 crore, while foreign investors net acquired shares for Rs 3,568 crore. They withdrew more than Rs 25,000 crore from the local market in the previous month and invested Rs 5,107 crore in Indian stocks. Over the last ten years, there have been eight instances in which FIIs have been purchasers of domestic equities in March.</p>
<p><strong>Quick Technicals</strong></p>
<p>The Nifty50 found support at the crucial level of 21,850 levels, according to the technical charts. According to analysts, a short-term violation of this support level can lead to a correction, particularly if the Rising Wedge technical bearish pattern validates the move.</p>
<p>If this collapse is confirmed, the Nifty can drop to levels between 21,700 and 21,625. Therefore, it will be critical to monitor how prices react around the pivotal support levels of 21900 and 21850 in the next sessions. Furthermore, the RSI Smoothened indicator’s average line and the appearance of a new sell signal indicate a limited upside, according to Sameet Chavan, Head of Research for Technical and Derivative Research at Angel One.</p>