The Indian stock market soared to new record levels on Tuesday, with the benchmark Sensex and Nifty indices closing at all-time highs. The rally was fueled by positive global sentiment and diminishing US recession fears, leading to a surge in market capitalization of over ₹2 lakh crore.
The BSE Sensex advanced 378 points or 0.47% to settle at 80,803, while the NSE Nifty gained 126 points or 0.51% to end at 24,699. The market capitalization of all listed companies on the BSE jumped by ₹2.27 lakh crore to ₹456.66 lakh crore.
Sector-wise, Nifty Financial surged over 1%, driven by SBI Life, ICICI Prudential Life, and HDFC Life. Nifty Auto, IT, Pharma, Realty, Healthcare, and Oil & Gas sectors also closed higher.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the strong performance to “positive global sentiment amid Israel-Hamas ceasefire talks and diminishing US recession fears due to recent favourable data.” He also noted that “easing geopolitical risks and weak China demand have led to a decline in crude prices, benefiting the domestic economy.”
Aditya Gaggar, Director of Progressive Shares, said, “With a bullish candle, the Nifty has filled its bearish gap zone and is now heading towards 24,870 (target of range breakout) with downside being shifted higher to 24,590.”
The Indian rupee also ended stronger on Tuesday, lifted by likely inflows and a slump in the dollar index that helped Asian currencies across the board.
The NIFTY 50 index, which represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange, has been a benchmark for the Indian stock market since its launch in 1996. As of July 2024, the index gives a weightage of 32.76% to financial services including banking, 13.76% to information technology, 12.12% to oil and gas, 8.46% to consumer goods, and 8.22% to automotive.
The index has seen several record highs, with the latest being a closing high of 24,836.10 and an intraday high of 24,999.75 on Monday, 29 July 2024. Some notable single-day gains include 651.50 points (17.74%) on 18 May 2009 due to the results of the 2009 Indian general election, and 421.10 points (3.69%) on 20 May 2019 following the exit polls of the 2019 General elections.
The NIFTY 50 index ecosystem consists of index funds, futures, and options, making it a popular choice for investors looking to gain exposure to the Indian market. The index is re-balanced on a semi-annual basis to ensure it accurately represents the performance of the Indian economy.
As the Indian stock market continues to reach new heights, investors are reaping the benefits of the sustained rally. The ₹2 lakh crore gain in market capitalization in a single day is a testament to the resilience and growth potential of the Indian economy.
