Sensex and Nifty, the two major indices of the Indian stock market, closed at record highs on Friday, September 15. Sensex gained 320 points, or 0.47 percent, to settle at 67,838.63, while Nifty rose by 89 points, or 0.44 percent, to reach 20,192.35. During the day, Sensex hit an all-time intra-day peak of 67,927.23, rallying 408.23 points or 0.60 percent.
The banking, auto, and IT sectors were the key drivers of the market gains, with companies like HDFC Bank, TCS, and Mahindra and Mahindra leading the charge. Furthermore, India emerged as the best-performing large market in September, with gains of over 4.5 percent. This impressive performance can be attributed to several factors, including positive domestic fundamentals, the success of the G20 Summit, favorable global cues, and renewed interest from foreign investors.
According to market analysts, the strength of Indian banking stocks has played a crucial role in the market’s resilience. Financials account for 32 percent weightage in the Nifty, and the 4.3 percent rise in Bank Nifty has contributed to the market’s record highs. Furthermore, the valuations of banking stocks are considered fair, which adds to the market’s stability.
While the large-cap segment of the market saw significant gains, the small-cap and mid-cap indices faced some pressure. Profit-booking and concerns of overvaluation led to a decline of 1 percent and 0.5 percent, respectively, in the BSE small-cap and mid-cap indices.
Looking ahead, market analysts expect the positive momentum to continue, particularly in the large-cap segment. Sectoral rotation may be observed in the broader market. The upcoming decisions from the US Federal Reserve, Bank of England, and Bank of Japan are being closely watched by investors.
The successful execution of the G20 Summit and positive economic indicators have strengthened market sentiments. Additionally, the lower consumer price index and wholesale inflation in India provide comfort amidst the global inflationary scenario. With the US interest rate decision expected to bring relief to the global markets, the overall positive trend in the Indian market is likely to persist.
– Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
– Vinod Nair, Head of Research at Geojit Financial Services
– Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.