The Indian stock markets have reached new all-time highs, driven by increased buying in heavyweight stocks. Vinod Nair, the Head of Research at Geojit Financial Services, stated that the domestic market sustained record levels thanks to this buying interest. The NSE Nifty 50 rose 0.82% to 18,972.10 points, while the BSE Sensex surged 0.79% to 63,915.42 points.
Investor sentiment has been positively impacted by strong foreign institutional investor (FII) inflows and a narrowing current account deficit. Additionally, the pharma and metal sectors have outperformed others, leading the market gains. The Indian markets have seen a consistent inflow of FIIs in recent months, contributing to their all-time high levels.
Christy Mathai, the Fund Manager-Equity at Quantum AMC, highlighted that India stands out among its peer countries, with moderating inflation, increased investing activity, and growth. The country’s infrastructure has been improving consistently, corporate balance sheets have strengthened, and the financial system is positioned to fund potential growth. Despite the recent rally, the fundamentals point toward strong earnings growth in the medium term.
Jaykrishna Gandhi, the Head of Business Development, Institutional Equities at Emkay Global Financial Services, mentioned that the Indian markets have remained mostly flat week on week, except for the uptick on Wednesday that resulted in the Nifty reaching new highs. The Bank Nifty has underperformed during this period but is expected to lead the rally in July, driven by the HDFC merger.
In the US markets, positive data has continued to emerge, including a climb in consumer confidence to the highest levels since January 2022, a 12.2% increase in new home sales since February 2022, and a 0.9% rise in home prices for the top 20 cities in the country.
Trideep Bhattacharya, the CIO-Equities at Edelweiss MF, believes that the Nifty’s all-time high reflects India Inc.’s relative earnings resilience and the recent progress of monsoons across the country. Siddhartha Khemka, the Head of Retail Research, Broking, and Distribution at MOFSL, emphasized that strong institutional flows, healthy macros, and robust earnings growth have driven the domestic market to new highs. He added that the market is expected to continue its upward trend and remain buoyant.
V.K. Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, expects the underperformance of HDFC Bank in comparison to the Nifty to change after the merger. He noted that the merger, which is expected to attract more institutional investment, will unleash synergies and enhance the prospects of the merged entity.
Overall, the Indian stock markets have reached new heights due to increased buying in heavyweight stocks, strong FII inflows, and a narrowing current account deficit. The positive investor sentiment is driven by the performance of sectors like pharma and metals, as well as the country’s macroeconomic outlook. With expectations of continued earnings growth and reasonable valuations, the market is anticipated to maintain its upward momentum.
