Today, Indian benchmark indices reached record highs as trading began on Wednesday. The NSE Nifty 50 surged by 0.7% to 24,291.75 points, while the S&P BSE Sensex climbed 0.72% to cross the 80,000 mark for the first time, reaching 80,013.77 points.
Driving this rally was HDFC Bank, which saw its stock soar by 3.5% at the opening bell. This significant gain by HDFC Bank played a crucial role in lifting the Nifty 50 index.
Analysts attribute HDFC Bank’s surge to expectations of an increased weightage in major global indexes, particularly Morgan Stanley’s MSCI indexes. Recent data indicated that foreign institutional investors’ ownership in HDFC Bank fell below 55% in the June quarter, potentially leading to a higher index weighting.
Abhilash Pagaria, from Nuvama Alternative and Quantitative Research, highlighted that an increased weightage could attract substantial inflows of $3.2 billion to $4 billion over a short period, further bolstering HDFC Bank’s position in the benchmarks.
Sector-Wise Gains and Market Sentiment
All 13 major sectors in the Indian market recorded gains today, buoyed by HDFC Bank’s performance. Sectors such as banks, financials, and private banks saw increases ranging from 1.3% to 1.5%, reflecting broad-based optimism.
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Despite fluctuating earlier in the week, both the Nifty and Sensex closed June with impressive gains of approximately 7%, making it their best month in 2024. This robust performance underscores investor confidence amidst positive economic indicators and global market trends.
Global and Economic Impact
In global markets, Asian indices also opened higher, following gains on Wall Street fueled by comments from U.S. Federal Reserve Chair Jerome Powell. Powell acknowledged progress in controlling inflation but emphasized the need for more data before considering rate cuts, slightly increasing expectations of a rate cut in September.
Domestically, Indian investors showed resilience with net purchases of shares worth Rs 648 crore ($77.6 million) on Friday, despite net selling by foreign investors amounting to Rs 2,000 crore during the same period. This contrasting activity reflects ongoing market dynamics and investor sentiment in India’s financial landscape.
Today’s record highs in Indian markets, driven by HDFC Bank and supported by sector-wide gains, underscore a positive outlook amidst global economic trends and investor confidence.
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