In an unprecedented move, the Sensex surged beyond the monumental 70,000 mark during intraday trade on Monday, propelled by the ongoing bull run. Although the benchmark index slightly receded from its peak at 70,054, this momentous achievement underscores the market’s resilience and vigor. Investors, however, exhibited caution as they awaited the Federal Reserve’s policy announcement scheduled for Wednesday, a key event that could influence the trajectory of the global financial landscape.
Closing at a fresh high for the fifth time this month, the 30-share index concluded at 69,928, registering a noteworthy increase of 103 points or 0.15 percent. Simultaneously, the Nifty50 experienced robust performance, closing at 20,997, up by 28 points or 0.13 percent. The broader markets outperformed expectations, with the Nifty Midcap 100 and the Nifty Smallcap 100 gaining 0.74 percent and 0.84 percent, respectively.
In tandem with the Sensex reaching new heights, the combined market capitalization of all BSE-listed companies achieved a historic pinnacle, surging past the Rs 350 trillion ($4.2 trillion) mark. This surge in market valuation mirrors the global bullish sentiment and heightened investor confidence.
Despite declines in most Asian markets and flat European trading, the US markets opened on a positive note. The unprecedented bull run in global equities since October is attributed to a sharp decline in US bond yields, fueled by growing optimism about the Federal Reserve’s anticipated shift to a series of interest-rate cuts in the coming year.
Domestic factors have further bolstered the Indian markets, including better-than-expected GDP growth during the September 2023 quarter and the recent victory of the Bharatiya Janata Party in three state elections, fostering hopes of political continuity at the Center. The Indian economy expanded by an impressive 7.6 percent during the September quarter, surpassing the Reserve Bank of India’s estimate of 6.5 percent.
Experts anticipate that the confluence of factors such as interest rates nearing the peak of the cycle, robust bank balance sheets, and political certainty could pave the way for a doubling of private sector capital expenditure in the next two to three years. This surge in private sector investments is anticipated to drive a rally in the stock market and contribute to economic recovery.
As investors keep a close eye on inflation data from India and the US, along with monetary policy decisions by key central banks, the market breadth remains positive. The week ahead is expected to provide crucial insights into the market’s resilience and potential future risks, as investors continue to navigate the intricate dynamics of the current economic landscape.