The Indian stock indices closed the week’s trade on a high note with continued gains supported by foreign portfolio investors. Both the Sensex and Nifty touched fresh record highs, before closing slightly below them at 82,365.77 points and 25,235.90 points, respectively. Sectoral indices such as pharma, realty, and healthcare were the top performers of the day. The positive sentiment in the market was largely attributed to US Federal Reserve Chair Jerome Powell’s indication of imminent rate cuts, which have boosted confidence in emerging markets, including India.
The Federal Reserve Chair’s statement at the Jackson Hole Symposium suggested that it was time for the US central bank to reduce interest rates as inflation rates aligned with its target. This could potentially make investments in emerging markets, such as India, more attractive. As a result, global markets, including the US and India, have seen a resurgence in recent highs, reflecting this optimism. As the markets look forward, they will be monitoring the release of Q1 GDP data later in the week to gauge the economic performance of the country.
In its latest monetary policy meeting, the Reserve Bank of India projected GDP growth for the coming years, with Q1 growth expected at 7.1 per cent. India’s GDP has shown consistent growth over the years, with impressive rates of 8.2 per cent during the financial year 2023-24. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, according to official data. The Economic Survey projected India’s real GDP growth at 6.5-7 per cent for 2024-25, acknowledging that market expectations are higher. Real GDP growth is a measure of economic growth adjusted for inflation.
Overall, the Indian stock market has seen positive trends in recent days, driven by foreign investor confidence and global economic cues. The potential rate cuts in the US have created a favorable investment climate in emerging markets, including India. As the markets look ahead to upcoming economic data releases, they will be able to better assess the country’s economic performance and make informed investment decisions. With strong GDP growth projections and a positive market sentiment, the Indian stock market seems poised for continued success in the near future.
