The benchmark Sensex index jumped 1,115 points (over 1 percent) during the day, reclaiming the 75,000 mark and hitting a record high of 75,336.44. This surge was driven by better-than-expected Q4 earnings, the RBI’s record dividend payout to the government, increased certainty about the election outcome, and reduced foreign investor selling in recent days.
Meanwhile, the NSE Nifty 50 index hit a new all-time high of 22,959. The Nifty Midcap index also reached a record high of 19,568, while the Nifty SmallCap index hovered around 15,920, just 50 points below its peak of 15,973.
“Indian markets hitting a new record is a sign of political stability after the elections. The rally is healthy because it is led by fairly valued large-cap stocks,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Key Contributors to the Rally
- HDFC Bank: Top contributor, adding 200 points. The stock rose almost 2 percent.
- Reliance Industries (RIL): Contributed 145 points, gaining 1.6 percent.
- Larsen & Toubro (L&T): Added 132 points, advancing 3.6 percent.
- ICICI Bank: Contributed 131 points, rising 1.9 percent.
- Axis Bank: Added 89 points, rising 3.3 percent.
Other Gainers
Maruti, M&M, IndusInd Bank, Titan, UltraTech Cement, Bharti Airtel, Bajaj Finserv, and SBI also rose over 1.5 percent each.
Stocks in the Red
- JSW Steel: Down 0.2 percent.
- NTPC: Down 0.9 percent.
- Sun Pharma: Down 2.9 percent.
- PowerGrid: Down 3.1 percent.
Reasons Behind the Surge
Experts point to the Reserve Bank of India’s unexpected ₹2.11 lakh crore dividend, announced yesterday, which is expected to help the government manage the fiscal deficit. This was a surprise, as the market had expected a ₹1 lakh crore dividend.
Additionally, investors are now more optimistic about a decisive victory for the BJP in the ongoing general elections. Analysts at foreign brokerage Bernstein predict the BJP could win around 330-350 seats.
Foreign portfolio investors have also reduced their selling activity recently. Over the past five trading sessions, they sold stocks worth ₹1,813 crore, compared to net sales of ₹38,186 crore in May so far. Furthermore, the US 10-year yield has fallen to 4.43 percent from a peak of 4.73 percent a month ago.
Sector Performance
The rally was mainly driven by buying in the auto, capital goods, and banking sectors:
- BSE Auto: Jumped 2 percent.
- BSE Bankex, BSE Capital Goods, BSE Industrials, BSE Financial Services: All up over 1.5 percent each.
BSE Metal and BSE Healthcare were the only sectors in the red, down 0.9 percent and 0.5 percent, respectively.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
