New Delhi [India], May 23 (ANI): The consistent bull run in Indian stock indices – Sensex and Nifty — continued through Thursday, and touched fresh highs yet again, reacting to Prime Minister Narendra Modi’s assertion that BJP-led alliance is on track to form the government for a record third term.
The prime minister also predicted that the margin of victory would be even broader.
In an interview with the Economic Times, PM Modi said his party’s election outcome will result in a record running streak on the country’s stock exchange market.
“I can say with confidence that on June 4, as the BJP hits record numbers, the stock market will also hit new record highs,” PM Modi said in the interview.
PM Modi told the business daily that the Sensex has rallied from 25,000 points to 75,000 in the past decade, noting that it highlighted that the investors have shown confidence in his government.
“Recently, we reached a whopping USD 5 trillion market cap for the first time ever,” the PM said, referring to BSE’s m-cap feat that happened earlier this week.
In early April, the BSE market map had touched USD 4 trillion, and it took a month and a fortnight to add another trillion. Market capitalisation or market cap is the total value of a company’s stock, derived at by multiplying the stock price by the number of its outstanding shares.
Barring a little volatility, Indian stock indices have been firm over the past several sessions, supported by strong support from a majority of sectoral indices.
With the five phases of elections now behind us, it is widely expected by investors that the Narendra Modi-led government will come back to office with a comfortable margin for his third term. This also likely triggered fresh stock buying.
Softer-than-expected US consumer inflation in April a consistent moderation in inflation in India and the sooner-than-normal arrival of the southwest monsoon in India, as predicted by IMD, mainly buoyed Indian stocks lately. The southwest monsoon is likely to hit Kerala on May 31, a day before the usual normal date of June 1.
“Early onset of southwest monsoon has provided a boost to the domestic market, which was underperforming in the last 2 months to other emerging markets,” Vinod Nair, Head of Research, Geojit Financial Services, said.
Last week, Sensex jumped about 2,000 points, on a cumulative basis. On Tuesday, i.e., today, Sensex closed a shy lower than its Friday closing at 73,953 points (0.07 per cent lower).
During Tuesday-Thursday this week, Sensex jumped over 1,500 points. On Monday, i.e., yesterday, the stock exchanges were shut for General Elections in Mumbai.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The Nifty hitting a new record is the market’s message of political stability after the elections. The rally is healthy since it is led by fairly valued largecaps.”
Firm GDP growth forecasts with the country set to remain the fastest growing major economy, inflation at manageable levels, political stability at the central government level, and appreciable central bank monetary policy, have all contributed to painting a bright picture for the Indian economy in recent quarters.
Overseas investors have been remaining net sellers of Indian equities for the past several sessions. Interestingly, domestic institutional investors during the same period stayed net buyers, largely making up for the outflows by the foreign investors.
“We anticipate the prevailing positive trend to continue, with the alignment of the banking index potentially adding further momentum. We are now targeting the 23,100-23,400 zone for the Nifty, with the 22,600-22,800 zone expected to provide support in case of any pullback. Investors should focus more on heavyweight stocks and remain selective in the midcap and smallcap segments,” said Ajit Mishra – SVP, Research, Religare Broking Ltd. (ANI)
