Stock markets are showing no signs of slowing down as both the Sensex and Nifty continue to hit new record highs. On Friday, the Sensex surged by an impressive 480 points, reaching yet another fresh high, while the Nifty surpassed the 19,100 mark. This strong performance has led experts to believe that the current rally is broad-based and will likely continue.
ICICI Securities expressed their optimistic outlook on the market, stating that they believe the current breakout will gradually lead to further gains. They also advised investors to view any temporary downturns as potential buying opportunities. This sentiment reflects the belief that the current rally is not just a short-term phenomenon but rather a sustained upward trend.
One of the factors contributing to this positive market sentiment is the strong economic activity seen in the first quarter of FY24. Despite concerns about inflation and the potential need for higher interest rates, economic indicators have remained strong, boosting confidence in the domestic economy. In addition, the current account deficit (CAD) has narrowed significantly, reaching $1.3 billion or 0.2% of GDP in Q4 FY23 compared to $16.8 billion or 2% of GDP in Q3 FY23 and $13.4 billion in Q4 FY22.
Large US banks passing the Federal Reserve’s stress test has also had a positive impact on bank stocks, contributing to the overall market surge. This demonstrates that these banks have enough capital to withstand any potential economic downturn. The sentiment from Mitul Shah, Head of Research – Institutional Desk at Reliance Securities Ltd, supports this view, highlighting the positive performance of bank stocks in light of the stress test results.
In conclusion, the stock market’s upward trajectory continues, with both the Sensex and Nifty reaching new all-time highs. This rally is seen as broad-based and likely to continue as economic activity remains robust and optimism surrounding the domestic economy grows. Investors are advised to view any temporary setbacks as opportunities to enter the market. With ongoing global economic trends and positive indicators in the banking sector, the stock market’s momentum is expected to persist.
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