The Indian stock indices, Sensex and Nifty, reached all-time highs on September 20, with the Sensex closing at 84,544 and the Nifty closing at 25,791. This surge was driven by gains in sectors such as auto, energy, and banking. The Bank Nifty closed at 53,793, while Nifty mid-cap closed at 60,209, with all sectoral indices closing in the green. Major sectoral indices like Bank and Financial Services, FMCG, and Consumer Durables also achieved new highs, reflecting the positive sentiment in the market.
Experts attribute this rally to the expectation of an RBI rate cut following the rate cut by the Fed. Investors are optimistic about improved economic conditions and strong corporate earnings, leading to the record levels in the Indian stock market. The market sentiment on the day of the surge was boosted by the global market showing strength and the anticipation of an interest rate cut announcement in the upcoming RBI policy. Sectors like auto and finance have been particularly active, with FMCG also performing well due to the dual benefit of demand and reduction in input costs.
Vinod Nair, the Head of Research at Geojit Financial Services, noted that traction is on rate-sensitive sectors like Auto and Finance, with conventional sectors like FMCG also seeing strong performance in anticipation of good results. There has been a significant increase in buying across sectors, with consumption and realty leading the charge on the day of the surge. The overall sentiment is positive for the long term, especially for sectors like Financials, Pharma, and IT, where demand is expected to pick up.
Krishna Appala, a Senior Research Analyst at Capitalmind Research, observed that there was initially a ‘buy the rumour, sell the news’ pattern following the surge, but the market quickly resumed its upward trend, hitting an all-time high. This bodes well for the long term, with sectors like Financials, Pharma, and IT likely to benefit from the positive market sentiment. Overall, experts are optimistic about the future performance of the Indian stock market, with expectations of continued growth and strength in various sectors.
