Today's
stock market saw record highs for the Sensex and Nifty 50. GDP statistics from
exit polls in 2024: four reasons why the market is booming
The current state of the stock market: The Nifty 50 and the Sensex, two benchmarks
for the Indian stock market, surged to all-time highs in early trade on Monday,
June 3, following predictions from most exit polls on Saturday, June 1, that
the NDA, lead by the Bharatiya Janata Party (BJP), may win more than 350 of the
543 Lok Sabha seats in 2024. Election-related anxiety subsided for the Indian
stock market, as exit polls indicated that the BJP-led NDA would win a sizable
majority and return to power. In contrast to its previous closing of 73,961.31,
the Sensex began 2,622 points higher at 76,583.29 and climbed 2,778, or 3.8
percent, to establish a new record.
The BSE Midcap index hit its
sparkling all-time high of 44560.97 throughout the session but closed 3.54 per
cent higher at 44,367.67. The BSE Smallcap index hit its fresh file excessive
of 48,973.96 at some stage in the session and sooner or later settled with a
obtain of 2.05 per cent at 48,232.30. Nearly three hundred stocks, such as SBI,
ICICI Bank, Axis Bank, Bharti Airtel, Larsen and Toubro, Mahindra and Mahindra,
NTPC, and Power Grid, hit sparkling 52-week highs in intraday trade on the BSE
on Monday. In May, the Nifty 50 and Sensex broke their three-month prevailing
run, closing in bad territory due to heightened volatility driven by using
election-related uncertainty. The volatility index India VIX surged 91 per cent
in May. Although the exit poll consequences have been the foremost catalyst,
professionals have identified three additional factors that can also have
bolstered stock market sentiment. “Nifty has opened with a hole up primarily on
the returned of the exit poll numbers indicating a clean sweep for the BJP-led
NDA government for the 1/3 time in a row. Apart from this, there have been few
other things which pushed the index greater like better-than-expected GDP
numbers, the robust pullback in US markets on Friday, the arrival of monsoon
and a discount in fiscal deficit," said Apurva Sheth, Head of Market
Perspectives and Research, SAMCO Securities. Sheth underscored that the Nifty
50 is currently placed above the top side of the rising parallel channel. He
believes that the index has the practicable to touch 23,500 as the counting
begins on 4 June. Sheth said merchants need to use this possibility to book
income in their lengthy positions and wait for dips in Nifty round 23,000 to
22,800 ranges to create sparkling long positions.
“The medium-term goal in Nifty
is round 24,500," said Sheth. Let's take a seem at four fundamental
triggers that boosted the market to record excessive levels:
Exit poll results
As Mint mentioned earlier, most exit ballot outcomes
on June 1 estimated a historic third term for Prime Minister Narendra Modi-led
National Democratic Alliance (NDA) authorities at the Centre. The Bharatiya
Janata Party (BJP)-led NDA is projected to win more than 350 plus seats, as per
at least ten exit polls.
Three important exit polls – India Today-My Axis
India, India TV-CNX, and News24-Todays Chanakya – have envisioned 400 plus
seats for the NDA. The pollsters have anticipated much less than 200 seats for
the Opposition INDIA bloc.
With the Lok Sabha elections concluded analysts
assume that the market will continue to be in wonderful territory in the coming
days, barring any surprising terrible developments.
"We expect Indian equities to upward jab over
the subsequent 3-4 days, with the Nifty accomplishing a new all-time excessive
this week. We expect the Nifty to reach approximately 23,200-23,300 levels
throughout this period. Additionally, we foresee the India 10-year yield
achieving 6.9 per cent and the Indian rupee appreciating to 82.75," said
Amit Goel, Co-Founder & Chief Global Strategist at Pace 360.
Macro boost
According to records launched through the National
Statistical Office (NSO) on Friday, May 31, India's gross domestic product
(GDP) for the January-March quarter of fiscal 2023-24 (Q4FY24) came in at 7.8
per cent, while for the full 12 months FY24, the Indian financial system grew
via 8.2 per cent, beating estimates. Moreover, the government's fiscal deficit
for 2023-24 stood at 5.63 per cent of the GDP, marginally higher than the 5.8
per cent estimated in the Union Budget, according to facts launched through the
Controller General of Accounts (CGA) on Friday, May 31. The GDP numbers on
Friday have been higher than expected, with 8.2 per cent growth. This will
supply indispensable support to the market. S&P’s upward revision of
India’s rating outlook also is positive," stated V K Vijayakumar, Chief
Investment Strategist, Geojit Financial Services. The GDP numbers on Friday
were higher than expected, with 8.2 per cent growth. This will furnish critical
guide to the market. S&P’s upward revision of India’s ranking outlook
additionally is positive," said V K Vijayakumar, Chief Investment
Strategist, Geojit Financial Services.
Across-the-board buying
The market witnessed vast buying, led with the aid
of the banking, financial, metal, realty, and oil and fuel sectors. The Nifty
Bank index surged over 4 per cent to hit a fresh document excessive of 50,990.
The Nifty PSU Bank index soared almost 7 per cent in morning trade, whilst Realty,
Metal and Financial Services indices jumped up to 4 per cent.
Positive global cues
Positive international cues additionally supported
home market sentiment. Inflation remains sticky, but hopes of charge cuts in
Europe have been growing. The US Fed, too, can also think about rate cuts in
the 2nd half of the year. Moreover, current macro information prints in some
fundamental Asian economies have come positive. According to Reuters, Japan's
manufacturing facility recreation multiplied for the first time in a yr in May,
whilst South Korea's manufacturing unit endeavor grew at the quickest tempo in
two years.
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