Indian Stock Market has today added a new golden chapter in the pages of history. Today something happened on Dalal Street which even the biggest market giants could not imagine. The main indices Sensex of Bombay Stock Exchange (BSE) and Nifty of National Stock Exchange (NSE) have reached their highest ever levels, due to which the record of the biggest rise in the last 35 years has been completely destroyed. This unprecedented market rally has not only brought a smile on the faces of domestic investors, but has also given a sting to India’s strong financial system at the global level. There was a strong buying environment in the market right from the early trading and by the end of the day’s play, Nifty and Sensex closed with a gain of record points. With this record-breaking rise, a historic increase has been recorded in the total value of the Indian stock market.
The biggest and most direct benefit of this record-breaking performance of the stock market has been to the pockets of common and special investors. Within just a few trading sessions, the total market capitalization of companies listed on the Bombay Stock Exchange (BSE) has increased by a huge amount of ₹29.57 lakh crore. This huge increase in the wealth of investors has increased the enthusiasm of new retail investors in the market manifold. Maximum buying was seen in shares of banking, IT, auto, metal and realty sectors. From largecap companies to midcap and smallcap indices were also seen trading at the highest levels of the day with green marks. Market experts believe that this historic surge in investors’ portfolios is the biggest proof of the strength of the Indian economy and the excellent results of the companies.
Many major global and domestic factors have been responsible for this explosive rise in the stock market that broke the 35-year record, which together gave rocket speed to the Indian markets:
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Stormy comeback of foreign institutional investors (FIIs): Foreign investors, who have been withdrawing money from Indian markets for some time, have once again expressed their confidence in the Indian stock market. Given the stable performance of the Indian economy amid global uncertainties, FIIs have invested huge amounts of capital in Indian equities.
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GDP growth and strong foundation of Indian economy: India’s gross domestic product (GDP) rate is growing at the fastest pace among major economies of the world. The balanced monetary policies of the Reserve Bank (RBI), controlled inflation and continuously increasing manufacturing and service activities in the country have increased investor confidence.
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Excellent quarterly results of companies (Q2/Q3 Results): During the current financial year, major Indian companies have presented much better financial results than expected. This double-digit growth in profits of the corporate sector further strengthened the buying environment on Dalal Street.
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Very positive signals from global markets: The Indian stock market directly benefited from the signal of interest rate cut by the US Central Bank (US Federal Reserve) and the return of momentum in Asian markets. Stability in crude oil prices in the international market has also helped in reducing the input costs of Indian companies.
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Strong support for domestic retail investors and mutual fund SIP: The record investment being made every month by Indian retail investors through Systematic Investment Plan (SIP) is proving to be a strong shield for the market. The increasing number of demat accounts and continuous buying by domestic institutional investors (DIIs) saved the market from falling and paved the way for creating a new history.
After this historic boom on Dalal Street, now only one question is arising in the mind of every small and big investor whether this momentum of the stock market will continue like this in future or will any correction be seen in it. Leading market strategists and analysts believe that even though some profit booking may be seen at the short-term level, the long-term outlook of the Indian stock market remains very positive and bullish. India’s growing economic strength, government’s huge focus on infrastructure and digital revolution are all set to take the stock market to new heights in the coming years as well. Experts have advised common investors to continue investing in stocks with quality and strong fundamentals in a phased manner instead of getting carried away by any bullishness.