The stock market is witnessing a historic surge, with Nifty-50 setting a new record high. The Indian share market closed with record gains, driven by robust support from the IT sector. Following support from IT shares, Nifty surpassed the 21,900 mark for the first time during Friday’s trading session. Sensex also reached a record level of 72,720. After the day’s trading, Nifty closed at 21,908, gaining 260 points, while Sensex closed at 72,568, marking an increase of 847 points. Nifty Bank also surged by 290 points, closing at 47,728.
During the trading session, Nifty-50 index reached 21,848, and Sensex reached 72,463.99 with a rapid increase of 742.8 points. Notably, Sensex had set a record high of 72,557.25 on January 1.
The market surge is attributed to the strong performance of IT shares, including Infosys, Tech Mahindra, Wipro, TCS, and HCL Tech, which are pushing the market to record highs. Additionally, BSE Midcap and Smallcap indices have also touched new record levels during the trading session.
Now, let’s explore the factors contributing to the market’s momentum:
- Strong Growth in IT Shares: In the December quarter, IT shares experienced significant growth, with companies like TCS and Infosys presenting impressive results. The Nifty IT index witnessed a surge of over 5%, reaching a new 52-week record level of 36,482.25. Post the earnings in the December quarter, Infosys and TCS exhibited remarkable growth, with Infosys reporting a consolidated net profit of ₹6,106 crores, and TCS registering a consolidated revenue of ₹60,583 crores.
- Expectation of Good Third Quarter Earnings: Experts suggest that the anticipation of robust earnings for the December quarter is boosting the market. The Nifty 50 has seen a growth of 14.6% CAGR in the past decade, with the current market highs attributed to increased investor confidence and foreign money inflows.
- Expectation of Interest Rate Cuts: The positive market sentiment is further supported by expectations of interest rate cuts by the US Federal Reserve and RBI in the first half of 2024. The overall outlook for India’s economic growth is also considered a positive factor for market advancement.
- Technical Factors: Strong technical factors have influenced the market, with observations of slight retracement in Nifty-50 over the past few sessions. Analysts from ICICI Securities Direct predict that Nifty-50 might see an additional 500-point increase, reaching around 22,300 levels by the end of January.
In summary, a combination of strong IT sector performance, optimistic earnings expectations, potential interest rate cuts, and positive technical factors are contributing to the bullish trend in the market.