 |
|
The Indian stock market has experienced a significant resurgence, marked by a consistent rally over the past four trading sessions. This bullish trend has not only restored investor confidence but has also propelled key indices to multi-month and all-time highs. The Sensex, a benchmark index representing the performance of 30 of the largest and most actively traded stocks on the Bombay Stock Exchange (BSE), witnessed a substantial jump, closing at 78,553.20, a level unseen since January 3rd. Similarly, the Nifty 50, representing the top 50 companies listed on the National Stock Exchange (NSE), surged above the 23,800 mark, closing at 23,851.65. The magnitude of these gains is particularly noteworthy, with both indices recording their best weekly performance in four years, since the week ending February 5, 2021. This resurgence has effectively snapped a two-week losing streak, injecting renewed optimism into the market. The driving forces behind this rally appear to be multifaceted, encompassing a supportive domestic macroeconomic environment, encouraging forecasts for the monsoon season, and a moderation in oil prices. These factors have collectively contributed to a positive outlook for the Indian economy, bolstering investor sentiment and prompting increased exposure to riskier assets. The banking sector, in particular, has been a major beneficiary of this renewed optimism, with the BSE Bankex reaching a new all-time closing high. This surge in banking stocks reflects expectations of improved economic and credit conditions, fueled by the anticipated normal monsoon and easing retail inflation. The positive performance of the banking sector has further reinforced the overall market rally, contributing significantly to the gains observed in the Sensex and Nifty 50.
The impressive gains in the market indices have translated into a substantial increase in investor wealth. Over the past four sessions alone, the Sensex and Nifty have collectively gained 6.37% and 6.48% respectively, resulting in a significant appreciation of investment portfolios. On Thursday alone, investors’ wealth increased by a staggering ₹4.6 lakh crore, and the total increase for the week amounted to ₹17.92 lakh crore. Furthermore, the BSE market capitalization has surged by ₹25.77 lakh crore over the four sessions, highlighting the magnitude of the wealth creation driven by this market rally. This significant increase in investor wealth has a positive ripple effect on the economy, as it enhances consumer spending, encourages investment, and boosts overall economic growth. The positive sentiment prevailing in the market is further reinforced by the participation of foreign portfolio investors (FPIs), who have been net buyers of Indian equities for the third consecutive session. On Thursday, FPIs purchased shares worth ₹4,667.94 crore, bringing their total investment over the past three sessions to ₹15,492 crore. This continued inflow of foreign capital indicates a strong level of confidence in the Indian market and its growth potential. In contrast, domestic institutional investors (DIIs) have been net sellers, offloading shares worth ₹2,006.15 crore on Thursday and ₹6,470 crore over the past three sessions. This divergence in investment strategies between FPIs and DIIs may reflect different investment horizons or risk appetites, but the overall positive market sentiment is largely driven by the strong inflows from foreign investors.
While the benchmark indices have led the rally, the broader market has also participated, albeit to a lesser extent. The BSE Midcap and BSE Smallcap indices, representing mid-sized and small-sized companies respectively, have also recorded impressive gains, albeit slightly underperforming the Sensex and Nifty 50 on Thursday. However, during the week, the BSE Midcap and BSE Smallcap indices rose 4.24% and 4.69% respectively, and posted impressive gains of 6.15% and 7.88% over the past four sessions, demonstrating a broad-based participation in the market rally. The positive market breadth, with 2,427 gainers versus 1,522 losers on the BSE, further underscores the widespread nature of the rally. All sectoral indices on both the BSE and NSE ended in the green, indicating a positive performance across various sectors of the Indian economy. On Thursday, banking, telecom, financial services, services, and TECK were the top sectoral gainers, rising up to 2.56%. Over the week, realty, banking, financial services, and telecom stood out, posting gains of up to 7.08%. Within the Sensex, top gainers on Thursday included Zomato (Eternal), ICICI Bank, Bharti Airtel, Sun Pharma, and SBI, with gains of up to 4.37%. During the week, all 30 Sensex stocks closed in the green, reflecting the widespread positive sentiment. In the Nifty 50, Wipro was the only loser, while IndusInd Bank, Axis Bank, Adani Ports, Bharti Airtel, and ICICI Bank were the top weekly gainers, rising up to 15.34%. This comprehensive market rally, encompassing benchmark indices, broader market segments, and various sectors, signals a robust and sustainable upward trend in the Indian stock market.
Source: Market rally gathers steam