Last week, Indian benchmark indices continued their impressive bullish streak for the seventh consecutive week, marking the longest such run in the past six years. The resilience displayed by the market is attributed to several factors contributing to positive investor sentiment.
**Key Drivers of the Market Surge:**
1. **Potential Rate Cuts by the US Federal Reserve:** The indication of possible rate cuts by the US Federal Reserve in 2024 has significantly boosted investor confidence.
2. **Strong Economic Indicators:**
– **Index of Industrial Production (IIP):** The IIP surged to a 16-month high in October, reflecting positive economic growth.
– **RBI’s Positive GDP Forecast:** The Reserve Bank of India’s optimistic remarks on India’s GDP forecast added to the positive sentiment.
3. **Favorable External Factors:**
– **Crude Oil Price Decline:** Falling crude oil prices contributed to the market’s upward trend.
– **Foreign Portfolio Investment (FPI) Inflows:** Sustained FPI inflows and foreign investors extending their investment streak in December.
4. **Record Highs for Nifty 50 and S&P Sensex:**
– **Nifty 50:** Soaring to an all-time high of 21,492 points, concluding the week with a robust rally of 2.32%.
– **S&P Sensex:** Achieving a new record high of 71,605 points, with a gain of 2.37%.
**Sectoral Highlights:**
1. **Nifty IT Index Surge:** The Nifty IT index experienced a significant surge of 7.15% following the Federal Open Market Committee’s (FOMC) dovish stance, hinting at potential rate cuts in 2024. This boosted buying interest in Indian IT stocks.
2. **FPI Inflows Continue:** FPIs extended their investment streak in December, acquiring ₹42,733 crore worth of Indian equities. The positive global outlook and the inclusion of India in the JPMorgan Emerging Market Bond Index contributed to high enthusiasm among FPIs.
**Crude Oil and Dollar Movement:**
– **Crude Oil Prices:** After a two-week decline, crude oil prices saw a slight increase due to dovish comments from the US Federal Reserve. However, both Brent and WTI are on track for their third consecutive monthly loss.
– **US Dollar Index:** The US dollar index recorded a 1.34% decline, measuring a drop in the strength of the dollar against major currencies.
**Technical Outlook for Nifty 50:**
The Nifty 50 maintains its bullish momentum, with resistance observed at 21,500 and immediate support at 21,300. Technical analysts anticipate a potential further rally upon breaching the resistance, with the Nifty aiming for levels around 21,700 and 22,000.
In summary, the Indian stock market’s resilience and positive trajectory are driven by a combination of domestic economic indicators, global factors, and favorable market sentiment. Investors remain optimistic about the growth prospects, making India an attractive destination for investments.
