Nifty, Sensex hit record high | Indian market starts new fiscal on bullish note

The Indian equity market has opened the financial year 2024-25 with great enthusiasm, reflecting a positive trend that suggests a continuation of the bullish momentum witnessed at the end of FY24. Let's dive into a comprehensive analysis of the market's performance, highlighting key sectors and stocks, as well as potential outlook for the year ahead.

Week in Review: A Strong Finish to FY24

The final week of FY24, although short with just three trading sessions, showcased a significant uptick in market performance. Benchmark indices, including the Nifty and Sensex, soared close to their previous highs, driven by a flurry of fund buying across various sectors. 

This led to a broad-based rally, with the Nifty posting a 1.6% gain in the March series, contributing to a 28.6% increase for the entire fiscal year. The Mid-cap, Small-cap, and Large-cap indices also saw impressive gains, rising by 63%, 60%, and 32%, respectively.

Stock Market Today | A Promising Start to FY 2024-25

On the first day of FY 2024-25, the Indian stock market continued its bullish streak, with significant buying activity propelling the power, realty, and metal sectors. The Sensex and Nifty not only started strong but also hit fresh highs, signalling a robust start to the new financial year despite some profit-booking at higher levels.

At the close of the trading session, the Sensex surged by 363.20 points, or 0.49%, to settle at 74,014.55. Meanwhile, the Nifty gained 0.61%, adding 135.10 points to close at 22,462. These indices not only reflected a strong start but also reached fresh highs during the session, with the Sensex peaking at 74,254.62 and the Nifty at 22,529.95. Although there was some profit-booking at higher levels, which slightly tempered the gains, the overall momentum remained positive.

The BSE Mid-cap and Small-cap indices also participated in the rally, recording gains of 1.6% and nearly 3%, respectively. This indicates a healthy risk appetite among investors, extending beyond the large-cap stocks and showcasing confidence in the broader market.

Sectoral Highlights

While the auto and FMCG sectors faced some challenges, they stood as the exception in an otherwise green landscape. Key sectors such as metal, power, capital goods, healthcare, and realty saw substantial gains ranging from 1-4%. Additionally, the oil & gas, information technology, and banking sectors experienced moderate increases, each up by 0.5%. 

Top Performers and Underperformers

Leading the pack among the Nifty gainers were notable names such as Tata Steel, JSW Steel, Adani Ports, Shriram Finance, and Divi’s Labs. On the flip side, Eicher Motors, Titan Company, Bajaj Auto, LTIMindtree, and Nestle found themselves on the list of losers. 

Looking Ahead: Market Sentiment and Key Events

As we move further into FY25, the focus will shift towards corporate earnings reports and management commentary, which will offer insights into the year's potential market trends. Upcoming events, such as the general elections and potential global rate cuts, will play a crucial role in shaping market sentiment and investment strategies. 

The anticipated victory of the BJP in the general elections, despite being widely expected, could result in a deceleration of government-related activities during the first half of the year. This slowdown is crucial as it may affect sectors reliant on the investment cycle, which has been buoyed by government expenditures. Once a new government is in place, the focus will shift back to regular economic activities, with private investment confidence being crucial. The announcement of a final budget by the new administration will be particularly telling, as it could introduce significant policy directions that may necessitate a recalibration of investment strategies based on the economic forecast.

Another pivotal moment will be the potential rate cuts by global central banks, with the decisions of the US Federal Reserve and the Reserve Bank of India being of paramount interest to Indian investors. The frequency and nature of these adjustments are closely monitored for indications of whether rate cuts will occur sooner or later than expected. For Indian businesses, the prospect of reduced borrowing costs heralds a welcome shift towards lower operational expenses, potentially catalyzing earnings growth primarily through investment demand, as consumption momentarily recedes into the background. This environment of lower interest rates is anticipated to herald a favorable period for the Indian economy.

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