After a mild correction in the previous session, Indian stock indices saw a positive start on Wednesday. At 9:19 am, the Sensex was at 74,887.25 points, up by 203.55 points or 0.27 per cent, while the Nifty stood at 22,698.25 points, an increase of 55.50 points or 0.25 per cent. Among the Nifty 50 stocks, 35 were on the rise, 13 saw declines, and two remained unchanged.
Last week, Indian stocks continued their positive momentum into the first week of the new financial year starting April 1. Looking ahead, investors are eagerly awaiting India’s retail inflation data for March, which is scheduled to be released on Friday. Additionally, alerts from the weather bureau regarding heat waves will also be closely monitored for any potential market impact.
Retail inflation in India currently stands within the Reserve Bank of India’s (RBI) comfort range of two to six per cent, albeit above the ideal scenario of 4 per cent. In February, it was recorded at 5.09 per cent. Managing inflation has been a significant focus for many countries, but India has largely navigated its inflation trajectory effectively.
Supporting the positive sentiment in Indian stock markets are sustained inflows of funds from foreign portfolio investors (FPIs). FPIs have been net buyers for the second consecutive month in March, after turning net sellers in January 2024. According to data from the National Securities Depository Limited (NSDL), FPIs purchased stocks worth Rs 35,098 crore in March and Rs 1,539 crore in February. In April so far, their purchases amounted to Rs 1,590 crore.
“Volatility is expected in today’s trading due to significant US events, including the release of March US CPI and the minutes of the Fed’s March FOMC meeting. Positive factors such as expectations of robust Q4 corporate earnings and a pre-election rally are supporting the market,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted, “The hallmark of a bull market is its ability to set new record highs. This has been happening in the mother market US and also in the Indian market.” He noted that the recent rally in India is driven by fundamentally strong sectors like capital goods, automobiles, banking, and metals. The Indian economy’s robustness, sustained capital flows into mutual funds, and domestic investors’ enthusiasm are factors supporting this rally. However, he cautioned that valuations of the Smallcap segment are elevated and unjustified.
On Thursday, Indian stock markets will remain closed for Eid Celebrations.
Santosh Meena, Head of Research at Swastika Investmart Ltd, attributed the market’s strength to various factors, including central banks worldwide implementing interest rate cuts and governments enacting fiscal stimulus packages during the COVID-19 crisis. “This strategy proved effective, leading to a robust economic recovery in India,” Meena remarked. He expressed optimism about India’s future economic prospects, highlighting its status as the fastest-growing economy globally and predicting a major bull market that could persist for the next few years. Meena also mentioned the possibility of the Sensex reaching 100,000 in the near future. However, he advised investors to focus on quality stocks and maintain a long-term investment approach.
In conclusion, the Indian stock market continues to exhibit positive trends, buoyed by various domestic and global factors. Investors are closely monitoring key economic indicators and external events for further cues on market direction.
