Nifty Hits All-Time High After Strong Growth Data, Sensex Rises 300 Points
The Nifty index reached a new all-time high on Friday following better-than-expected economic growth in the September quarter, boosting optimism about global interest rates. The NSE Nifty 50 index rose by 0.52% to 20,238.45, marking a fresh record high, while the S&P BSE Sensex increased by 0.44% to 67,286.16 as of 9:35 am.
The Indian economy expanded by 7.6% in the September quarter, surpassing economists’ forecast of 6.8% and the Reserve Bank of India’s estimate of 6.5%. This growth was mainly driven by manufacturing. Pramod Gubbi, founder of Marcellus Investment Management, stated, “India’s growth outlook remains positive, with various government capex initiatives likely to stimulate consumption at the bottom of the pyramid.”
The expectation that the US interest rate cycle has reached its peak has encouraged investors to shift towards riskier assets like emerging equities, particularly in India, according to Gubbi. In November, Nifty and Sensex experienced their best month of the year, supported by the return of foreign portfolio investor (FPI) inflows. FPIs purchased stocks worth 90 billion rupees ($1.1 billion) after two consecutive months of selling.
Wall Street indexes also rose, with the Dow Jones Industrial Average recording its best month since October 2022, following data indicating a slowdown in consumer spending, which boosted the rate outlook. Additionally, exit polls for state elections showed a narrow advantage for the Bharatiya Janata Party in Rajasthan and Madhya Pradesh, while the Congress Party is leading in Chhattisgarh and Telangana.
Madhavi Arora, lead economist at Emkay Global Financial Services, commented, “A decisive BJP win will reinforce the consensus that the party is on the front-foot for the 2024 general elections and is likely to add another rally to the markets.” India’s general elections are scheduled for early next year.
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