Sensex, Nifty50 touch new all-time high: What's fueling the rally
What's the story
It has been a good day for stock market investors. Both Sensex and Nifty benchmark indices registered strong gains and hit their all-time high levels on Friday. Sensex jumped over 1,070 points, or 1.49%, to hit a fresh high of 72,790.96. Likewise, the Nifty50 rose over 281 points, or 1.3%, hitting a record of 21,928.25 in today's session.
Insights
IT stocks drive the rally
Shares of major IT companies, such as Infosys, Tech Mahindra, Wipro, TCS, and HCL traded as the top gainers in the Sensex index. The December quarter earnings of TCS and Infosys fueled a substantial uptick in most IT stocks. At the time of writing, the Nifty IT index skyrocketed over 5%, achieving a new 52-week high at 36,553.15.
Insights
Expectations of positive Q3 earnings
Investor optimism is high as the market expects strong Q4 earnings, particularly in the IT sector. TCS and Infosys earnings have exceeded street expectations, boosting confidence in the overall market. "A new high is an outcome of rising investors' interest on the back of expectations of strong corporate earnings growth and foreign money flows," Shrey Jain, Founder of SAS Online told LiveMint.
Insights
Factors at the macro level
Positive sentiment among investors is also driven by expectations of rate cuts by US Federal Reserve and the Reserve Bank of India (RBI) in the first half (H1) of 2024. Adding to this optimistic atmosphere is India's strong growth outlook. India registered a 7.7% GDP growth in H1 FY24. Per the initial advance estimate, India is projected to grow at 7.3% in FY24 overall.