Nifty 50, Sensex gain over 1% each: Why Indian stock market is rising today — explained with 5 reasons

The stock market on Friday witnessed strong buying after data showed a stellar GDP growth for India for the third quarter of the current financial year. Most of the sectors are in the green zone except IT and healthcare stocks. According to stock market experts, the Indian stock market is in a bull trend as the strong GDP growth for India for the third quarter of the current fiscal has brought back mojo in banks and other PSU stocks. They said that ease in the US inflation has also played its role in boosting the sentiment of Dalal Street bulls.

The Nifty 50 index regained the psychological 22,000 mark and went on to touch an intraday high of 22,295.50, missing the existing record high of 22,297.50 by a whisker. However, the BSE Sensex today opened higher and went on to touch a new peak of 73,574.

Top 5 reasons for the rise in the stock market today

1] GDP of India: “In another pleasant surprise, India's real GDP grew 8.4% YoY in 3QFY24, compared to the market (and our) forecast of 6.5-7%. Further, the last two quarters' growth was also revised up to 8.1% (from 7.7% earlier). FY22 growth was revised up to 9.7% (from 9.1%) and FY23 was revised down to 7% (from 7.2%). Notably, the unexpectedly sharp growth of 32% YoY in net taxes supported 8%+ GDP growth, as real GVA growth was 6.5% in the quarter. Details suggest that the decline in the farm sector was entirely offset by double-digit industrial growth and strong services,” said Nikhil Gupta, Chief Economist at Motilal Oswal.

2] Buzz in banking and PSU stocks: “Recently some surveys have predicted victory of the BJP-led NDA in upcoming Lok Sabha elections. This has brought back mojo in banking and PSU stocks, which is also fueling the Indian indices, especially Nifty 50, Bank Nifty, and other major indices,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.

3] Strong global cues: After the release of in-line US inflation data on Thursday, the S&P 500 and the Nasdaq ended at record highs, which has boosted the global market sentiment, said Gorakshkar.

4] US Fed rate cut buzz: “After the surprise US inflation data, the buzz for the US Fed rate cut is gaining momentum. Hence, the US treasury yields are expected to come down and people are expected to shift money from bonds and currency market to other assets, which include equities as well,” said Sandeep Pandey, Founder of Basav Capital.

5] Strong Indian economy: On how strong the economy and the stock market are inter-connected, Pandey of Basav Capital said, “The Nifty 50 index grows two to two and a half times annually against the annual growth registered by the GDP of India. As the GDP of India has maintained 8 percent or more growth in all three quarters of the current fiscal, the market is expecting a 16 to 20 percent rise in the Nifty 50 index in the current fiscal.”

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