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The Indian stock market experienced a rollercoaster ride on Tuesday, September 24, 2024, as the benchmark Sensex breached the historic 85,000 mark for the first time before paring gains to close flat. This volatility was driven by a confluence of factors, including positive global sentiment spurred by China's stimulus measures, profit-taking at record highs, and sector-specific losses in fast-moving consumer goods (FMCG) and select banking shares.
The 30-share BSE Sensex initially surged, reaching a new intra-day peak of 85,163.23, fueled by optimism stemming from China's economic stimulus package. Metal stocks, in particular, saw gains due to the anticipated boost in demand. However, the index encountered profit-taking in the afternoon session, with selling pressure in prominent companies like Hindustan Unilever, Kotak Mahindra Bank, and ICICI Bank dragging the Sensex down from its highs.
Despite the Sensex's flat close, the Nifty 50 index managed to eke out modest gains, closing at a new high of 25,940.40. While the overall market sentiment remained positive, traders observed investors struggling to find clear direction following the recent record-breaking rally. This uncertainty was further amplified by the divergence in performance across sectors, with FMCG and banking witnessing declines, while metals, power, and utilities experienced significant gains.
The U.S. Federal Reserve's recent aggressive rate cut and expectations of a similar move by the Reserve Bank of India (RBI) in October continued to fuel optimism among foreign institutional investors (FIIs). This positive outlook, coupled with the strong inflow of funds from FIIs, is expected to maintain momentum in the Indian market in the near term. However, the performance of specific sectors remains a key factor to watch, as profit-taking at elevated levels could continue to impact market sentiment.
While the Indian stock market navigates this period of volatility, the overall trend remains positive, supported by strong economic fundamentals and a favorable global backdrop. The market's ability to sustain its recent highs and navigate sector-specific challenges will be closely watched as investors evaluate the implications of global economic developments and domestic policy decisions.
Source: Sensex hits 85,000 level for first time before closing flat; FMCG, banking shares drag