Upward Surge In Markets Triggers Optimism

BSE Sensex and Nifty 50 reached unprecedented milestones of 70,000 and 21,000, respectively, in an unbroken uptrend, driven by robust growth projections and a decisive electoral mandate 

In India, the bulls on Dalal Street have experienced a robust rally, fuelled by optimistic growth forecasts, a strengthening economic outlook, and a decisive electoral mandate in the recent elections. S & P Global Ratings upgraded India’s growth forecast for the fiscal year 2023-24 to 6.4 per cent, citing strong domestic momentum that offset headwinds from high food inflation and slow exports. In addition, the optimism conveyed by the Reserve Bank of India’s Monetary Policy Committee regarding the growth prospects of the Indian economy, along with a revised growth projection of 7 per cent and the maintenance of the policy repo rate at 6.5 per cent, uplifted investor sentiment. 

The Indian benchmark indices witnessed an unbroken upward trend, as both BSE Sensex and Nifty 50 surpassed historic milestones of 70,000 and 21,000 levels, respectively. BSE Sensex saw a notable surge of 5.84 per cent, while Nifty 50 recorded gains of 5.90 per cent over the past two weeks. After a considerable duration, the primary indices demonstrated a superior performance compared to the broader indices, with the BSE Mid-Cap index and BSE Small-Cap index registering gains of 5 per cent and 3.26 per cent, respectively. 

According to Bloomberg, prior to granting a loan to the Adani Group, the US had investigated the Hindenburg allegations and deemed them irrelevant. In addition, the favourable remark by the Supreme Court regarding the Adani Group bolstered investors’ risk appetite and resulted in a robust rally its stocks. This rally facilitated a recovery from the losses incurred during the tumultuous period following the Hindenburg allegations. The impressive surges in the shares of Adani Power Ltd., Adani Energy Solutions Ltd. and Adani Green Energy Ltd. propelled the BSE Power index to become the top-gaining sectoral index of the fortnight, boasting remarkable gains of 19.53 per cent. 

Also, the oil and gas sector experienced a notable rally of around 14 per cent, benefitting from the prevailing optimism surrounding the sector. While banking and real estate stocks sustained their robust upward trajectories, the BSE Fast Moving Consumer Goods and BSE Healthcare indices were among the sectoral indices that recorded relatively modest gains over the past two weeks. The primary market showcased exceptional resilience, notably seen in the Tata Technologies IPO, which achieved a remarkable 160 per cent listing gain attributed to the company’s robust outlook and substantial investor demand. 

The Indian Renewable Energy Development Agency (IREDA) IPO made an impressive debut on the stock exchanges, doubling investors’ wealth over the fortnight period. After a prolonged period, both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) emerged as net buyers. FIIs reported a sizeable inflow of ₹19,878.27 crore in the last two weeks, while DIIs contributed to support the market rally with an inflow of ₹ 8,680.03 crore.