Domestic Markets Spin Into A Higher Orbit

Benchmark indices have surged to new record highs amid robust economic indicators and optimism surrounding the corporate earnings season

The domestic market experienced a period of volatile trading sessions over the last two weeks, predominantly characterised by upward momentum. According to data released by the Ministry of Commerce and Industry, the index of eight core industries for February 2024 showed a growth of 6.7 per cent, an increase from 4.1 per cent in January 2024. In March, India’s gross Goods and Services Tax (GST) revenues reached their second-highest level, totalling ₹1.78 lakh crore. As per the latest data from the Reserve Bank of India (RBI), India’s foreign exchange reserves reached an unprecedented high of USD 648.56 billion. [EasyDNNnews:PaidContentStart]

The confluence of these favourable factors, coupled with optimism surrounding financial year-end corporate earnings season, has bolstered investor confidence. Following their ascent to new all-time highs on the bourses, Indian benchmark indices, BSE Sensex and Nifty 50, concluded the fortnight period with gains of 0.81 per cent and 0.86 per cent, respectively. Heightened buying activity, fuelled by attractive valuations of Mid-Cap and Small-Cap stocks following a notable decline, has propelled the broader indices to a robust recovery.

The BSE Small-Cap index stood out with impressive gains of more than 6 per cent, while the BSE Mid-Cap index also surged by over 4 per cent during this period. The resilience was evident across various sectors, with all sectoral indices posting positive numbers over the fortnight period. The BSE Metal index, serving as a sectoral indicator for the metals industry, outperformed others with gains of over 7 per cent. Significant buying activity has been observed in the real estate, infrastructure, railway and power sectors, fuelled by anticipation surrounding the upcoming Lok Sabha elections.

Investors are eyeing the potential positive impact on these sectors if a robust political mandate comes to fruition. On the contrary, the BSE Information Technology index saw significant gains trimmed as IT stocks reflected the weakness prevalent in the US markets. This decline was prompted by delayed expectations for Federal Reserve interest rate cuts, stemming from higher-thanexpected CPI data for the month of March.

In the past two weeks, foreign institutional investors (FIIs) turned into net sellers, while domestic institutional investors (DIIs) continued to be net buyers. FIIs recorded a significant net outflow of ₹10,362 crore, contrasting with DIIs, who supported the market with a sizeable net inflow of ₹12,232 crore during the same period. Continue reading to discover insights into the financial performances of industry leaders, updates on election-related developments, and the ongoing impact of Israel-Iran tensions, which have already been evident.

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