Nifty hit a fresh record on Friday as faster-than-expected economic growth in the September quarter added to optimism over global interest rate prospects.
The NSE Nifty 50 index rose as much as 0.52% to 20,238.45, a new record high, while the S&P BSE Sensex rose 0.44% to 67,286.16 as of 9:35 am.
India’s economy grew 7.6% in the September quarter, faster than the 6.8% forecast in a Reuters poll of economists and the Reserve Bank of India’s estimate of 6.5%, boosted by industrial growth.
“India’s growth prospects remain positive, with several government investment initiatives likely to boost consumption at the bottom of the pyramid,” said Pramod Gubbi, founder of Marcellus Investment Management.
The expectation that we are at the peak of the interest rate cycle in the US has facilitated the shift of capital flows to riskier assets such as equities from emerging markets, especially India, Gubbi added.
Nifty and Sensex posted their best month in 2023 in November, helped by returns on foreign portfolio investor (FPI) inflows.
FPIs posted a two-month selling streak in November, adding shares worth 90 billion rupees ($1.1 billion).
Wall Street stock indexes rose overnight, with the Dow Jones Industrial Average posting its best month since October 2022, after consumer spending data signaled a cooling in demand, boosting the interest rate outlook.
Meanwhile, exit polls for state elections showed a narrow lead for the Bharatiya Janata Party in the key states of Rajasthan and Madhya Pradesh, while the Congress appears to be in the lead in Chhattisgarh and Telangana.
“A decisive victory for the BJP will strengthen the consensus that the party is ahead in the 2024 general elections and likely add another rally to the markets,” said three analysts led by Madhavi Arora, chief economist at Emkay Global Financial Services.
India’s general elections are early next year.
