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regular-article-logo Tuesday, 27 February 2024

Nifty at record high with better-than-expected growth of 7.6 per cent in second quarter

Amid encouraging participation from foreign portfolio investors (FPIs), the gains in the benchmark indices also came on account of the exit poll projections for five states, which is being seen as a sign of political stability after the general elections in 2024

Our Special Correspondent Mumbai Published 02.12.23, 10:57 AM
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The Nifty hit record highs on Friday propelled by better-than-expected second-quarter growth of 7.6 per cent that also took the Sensex to an 11-week high of 67481.19, a gain of 492.75 points.

Amid encouraging participation from foreign portfolio investors (FPIs), the gains in the benchmark indices also came on account of the exit poll projections for five states,
which is being seen as a sign of political stability after the general elections in 2024.

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Benign crude oil prices and optimism about rate cuts next year by global central banks as inflation moderates also contributed to the rally despite concerns over expensive valuations.

The day belonged to the 50-share gauge Nifty which during intra-day levels touched a historic high of 20291.55, up 158.4 points or 0.78 per cent. The previous record was struck on September 15, 2023 when the index touched 20222.45.

Subsequently, the index settled at an all-time high of 20267.90 as it advanced 134.75 points or 0.67 per cent.

ITC led the gainers list in the Nifty as it climbed 3.06 per cent to finish at Rs 449.15. It was followed by NTPC, Axis Bank, Larsen & Toubro and Britannia among others which rose to 2.93 per cent.

“The Indian equity market is in a strong bullish mood and is hitting a fresh all-time high. We may continue our momentum and outperform our other global peers, backed by the strong fundamentals and under-ownership of FIIs,” Parth Nyati, founder of Tradingo, said.

“FIIs may become net buyers amid rising US bond yields and the strong macroeconomics of India. State election results may create some kind of volatility, but we are preparing ourselves for a pre-election rally. In terms of level, 21000 looks like an easy task in the near term for the Nifty.”

Vinod Nair, head of research at Geojit Financial Services, said the better-than-estimated GDP numbers will raise the growth outlook for 2023-24 and provide cheer to the market to continue its upward momentum. ``The global market also rallied on hopes that the ECB has completed its rate-hiking cycle on the back of easing inflation and ahead of the Fed chair speech on Friday. The auto sales numbers witnessed a festival cheer,’’ he added.

Provisional data from the stock exchanges showed foreign investors to be net buyers to the tune of Rs 1,600 crore.

Higher forecasts

A host of brokerages and economists have revised their growth forecasts for India after the surprising second quarter show on Thursday. These include Barclays Plc, Citigroup, Goldman Sachs, Morgan Stanley, Nomura, DBS, Deutsche Bank, and State Bank of India.

A note from Barclays said that given the higher-than-expected growth print and continued buoyancy in high-frequency indicators in the quarter, it is raising the 2023-24 GDP growth forecast to 6.7 per cent from 6.3 per cent.

Morgan Stanley said sharper-than-anticipated growth in government consumption and gross fixed capital formation were the main factors behind the high Q2 growth.

The brokerage expects the Indian economy will grow at 6.9 per cent in this fiscal compared with its earlier estimate of 6.4 per cent.

PMI boost

The manufacturing sector continued with its robust performance in November on the back of substantial easing in price pressures and strengthening demand from clients, a monthly survey said.

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose to 56 last month from the eight-month low level of 55.5 in October.
With inputs from the Delhi Bureau

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