Indian stock market hits record high levels; know what’s behind the rally, and will it sustain

India’s benchmark equity indices Sensex and Nifty rose to record high levels on Wednesday, amid a strong rally in the European and US markets, and fresh foreign fund inflows. Sensex climbed to the record 64,000 mark while Nifty hit the record 19,000 mark. Experts believe this market rally will highly likely sustain since it’s driven by a renewed sense of optimism.

Leading the rally were market heavyweights like Reliance and HDFC stocks. Reliance stock prices witnessed a rise of 1.39 per cent and HDFC stock of 2.30 per cent. Among other major gainers were NTPC, Tata Motors, Titan, Larsen & Toubro, IndusInd Bank, Infosys and Power Grid. However, Wipro and Tech Mahindra turned out to be the laggards for the day.

What’s behind the record market rally?

Fortune India noted that the current market rally was supported by short positions covering by traders ahead of the expiry of the June derivate contract. Other major factors that contributed to the market sentiments were sustained buying from major foreign investors and policy stimulus by China.

Dhiraj Relli, MD & CEO, of HDFC Securities Ltd, was quoted by Hindustan Times as saying, “Nifty made a new all-time high on June 28, triggered by buying from institutions and retail/HNI segments. Improving US economic data and hints from China about fresh stimulus measures have helped improve sentiments.”

Where do other Asian markets fare?

Asian markets saw mixed performance, with Tokyo and Hong Kong recording gains while Seoul and Shanghai experienced a decline. However, European markets fared well and traded in positive territory. In the US, the markets closed with significant gains on Tuesday.

Watch: India’s economy beats estimates in Q4 of 2023

Siddhartha Khemka, the Head of Retail Research, Broking and Distribution at MOFSL, commented on Nifty’s recent performance. He mentioned that after multiple attempts in recent days, the Nifty index finally surpassed its previous highs. This accomplishment was attributed to strong institutional flows, favourable macroeconomic conditions, and robust earnings growth, all of which contributed to driving the domestic market to new heights.

Will the market rally sustain?

Rupak De, a Senior Technical Analyst at LKP Securities, expressed his views on the Nifty index’s surge to a new all-time high. According to Hindustan Times, he attributed this development to a renewed sense of optimism in the market. 

De explained that the rally was supported by a breakout in consolidation observed on the daily chart, indicating a strong upward movement. Additionally, the Nifty index successfully invalidated a dark cloud cover pattern on the weekly chart.