Sensex, Nifty hit 52-week highs today: Here we decode why
What's the story
The Indian stock market is on a winning streak, with the Sensex and Nifty 50 hitting 52-week highs today. The Sensex surged over 700 points to reach a 52-week high of 84,656.56, while the Nifty gained nearly 1% to hit a high of 25,926.20. The rally comes amid positive global cues and strong performance from index heavyweights like Reliance Industries, HDFC Bank, and Infosys.
International impact
Positive global cues boost market sentiment
The Indian stock market's rally is also being driven by positive global cues. Major Asian markets such as Japan's Nikkei and Hong Kong's Hang Seng have posted significant gains. The Japanese market jumped 3% amid reports of a potential new prime minister, while China's Shanghai Composite index rose by 1% after its economy grew in Q3.
Corporate performance
Reliance Industries drives rally
Shares of Reliance Industries surged 3% after its Q2 results matched expectations. The sharp gains in this heavyweight company's shares have propelled the benchmarks higher. Other index heavyweights such as HDFC Bank and Infosys also contributed significantly to the gains in Sensex and Nifty 50.
Market stability
Q2 results in line with expectations
The Q2 results of Indian firms have largely been in line with expectations, with no sharp deterioration in the profits and margins. This stability is underpinning market sentiment. Foreign institutional investors (FIIs) have also been net buyers in the Indian stock market for three consecutive sessions, further improving the sentiment.
Future outlook
Rate cut expectations influence market
Expectations of future rate cuts by the US Federal Reserve and the Reserve Bank of India (RBI) are also influencing market sentiment. The market is factoring in two US Fed rate cuts of 25 basis points each in October and December this year. "Fed cuts weaken the dollar and improve flows in emerging markets," said Rahul Ghose, Founder and CEO of Octanom Tech.