Indian benchmark indices, the BSE Sensex and NSE Nifty, reached record highs on Monday, buoyed by robust economic growth data and expectations of a U.S. interest rate cut. The BSE Sensex closed at 82,572.73, up 0.25%, while the Nifty 50 traded at 25,299.60, also up 0.25%.
The Nifty’s rally extended for the twelfth consecutive session, driven by Wall Street’s positive performance and strong foreign institutional investment (FII). The index has risen for 12 straight sessions, marking its longest winning streak in about 17 years.
Attention is now focused on the auto sector following mixed August sales reports. Tata Motors and Maruti Suzuki saw declines, while TVS Motor and Hero MotoCorp posted gains.
India’s GDP growth slowed to 6.7% in the April-June quarter, but remains the highest among major economies. Emkay Global has raised its Nifty target to 26,000 for September 2025, citing interest rate cuts and consumption recovery as key factors.
Sensex and Nifty Hit Record Highs
The BSE Sensex climbed 502.42 points to 82,637.03, while the NSE Nifty50 rose 87.45 points to 25,239.40 by 9:20 AM on Monday. The indices hit record highs driven by positive global trends and Moody’s decision to raise India’s 2024 GDP growth forecast to 7.2%.
Additional support for the indices came from strong FII buying and encouraging U.S. GDP data. The Nifty has risen for the previous 11 consecutive sessions, supported by expectations of a U.S. rate cut in September and healthy domestic inflows.
Auto Stocks in Focus
Tata Motors and Maruti Suzuki reported declines in August sales, while TVS Motor and Hero MotoCorp posted gains. Tata Motors saw a 15% drop in commercial vehicle sales, totaling 27,207 units in August 2024, compared to 32,077 units in August 2023. Passenger vehicle sales also declined by 3% year-on-year, with 44,142 units sold in August 2024 compared to 45,513 units in the previous year.
Maruti Suzuki India reported a nearly 3.9% decline in sales for August 2024, with a total of 181,782 units sold compared to 189,082 units in August 2023. Domestic sales were particularly affected, dropping 8.4% to 143,075 units from 156,114 units in the same month the previous year.
In contrast, TVS Motor Company’s total sales surged by 13% in August 2024, reaching 3,91,588 units compared to 3,45,848 units in the same period last year. Two-wheeler sales jumped 14% to 3,78,841 units, while exports rose 14% to 99,976 units.
GDP Growth and Market Outlook
India’s GDP growth slowed to 6.7% in the April-June quarter, but remains the highest among major economies. Emkay Global has raised its Nifty target to 26,000 for September 2025, citing interest rate cuts and consumption recovery as key factors.
Domestic institutional investors (DII) have purchased shares worth $6.14 billion, on a net basis, so far in August, about twice the net foreign portfolio investors (FPI) outflows.
Market participants now await U.S. core personal consumption expenditures data, the Fed’s preferred gauge of inflation, on Friday to confirm bets of the September rate cut. Investors also await India’s April-June growth data, due after market hours.
Recommended Trades
Emkay Global has recommended buying Nifty, Bank Nifty, and NTPC. The firm believes that the market is likely to continue its near-term trend, with a breakout from the present possible if banking stocks witness significant buying.
However, the struggle for deposits experienced by the banking system and the consequent feared pressure on margins are keeping the demand for banking stocks depressed despite attractive valuations. Largecaps are outperforming the broader market now, which is a healthy trend.
The Indian stock market has reached new highs, driven by positive economic data and expectations of interest rate cuts. While the auto sector has seen mixed results, the overall market outlook remains positive, with recommended trades in Nifty, Bank Nifty, and NTPC. Investors will closely watch U.S. inflation data and India’s GDP growth figures for further cues.
