Narendra Modi's government was formed for the third time despite the loss of Lok Sabha seats. The government was formed with the support of two other parties, but important accounts remained with the BJP. Except civil transport, all other accounts remained with BJP. However, since Air India was taken over by the Tatas, this department has not been as bright as before. These developments had an impact on the Indian stock market and all major indices hit all-time highs. Check their Friday closing prices and their highs for the week:
Nifty 50 – 23465.60 High 23490.40
Sensex – 76992.77 High 77145.46
Bank Nifty – 50002.00 High 51133.20
Nifty Mid – 100 -55225.95 High 55270.95
Nifty Small 100 – 18043.60 High 18089.15
A strong desire for a stable government has indeed contributed to this boom; But at the same time there are some other reasons behind this boom. Positive Economic Indicators is the first reason.
Better-than-expected GDP growth, rising industrial production figures and falling inflation are building confidence among investors. Markets that fell more than six percent on the day of the Lok Sabha election results rebounded much more in the week after. It was like this. The market rebounds more than it crashes. Defense Minister Rajnath Singh reiterated the complete self-reliance of the defense sector. Not only this, the defense sector has set an export target of Rs 50,000 crore in the next five years. Due to this, shares of Paras Defence, Beml, Bel, MTAR, Bharat Dynamics, Zensar Teach rose. Shares of shipbuilding sector as well as Cochin Shipyard, Adani Ports, Shipping Corporation remained in the limelight. Hindustan Aeronautics HAL's dominance in aircraft manufacturing is driving the stock to new highs. Along with these sectors, the growth of the logistics sector inevitably takes place. Container Corp, Titagarh Wagons are not only leading today but will continue to be so.
Infrastructure development is the crux of any country's growth story. The interest that this government has shown towards Capital Expenditure from the beginning will remain the same from now on. The infra sector has been bullish for the past few weeks due to the confidence of these investors. Nifty Infra Index is currently at its all-time high (9028.70, high 9166.25) NCC, Bhel, Bel are expected to do well. The continuous horse race of the Power Sector is happening due to one thing, the huge demand for energy.
Strong corporate earnings also contributed to the recent boom. Many companies in IT, Pharma, Banking sectors showed very good financial results. Global Sentiments have been an important factor behind the ups and downs of any country's stock market lately. The global stock market is currently in a favorable environment due to the slow but easing tensions between Russia, Ukraine, Israel-Hamas, hopes of recovery in the US and China, and the Federal Reserve's decision not to raise interest rates from now on.
Foreign Investors (FIIs) are coming back in the Indian market from last few days. Last week also net purchase of 2030 crores was made in the Indian market. Jodi has a seamless purchase of DIIS. DIIS made a net purchase of Rs 6300 crore last week. There is a huge influx of people towards mutual funds. Due to the rapidly growing book size of SIPs, huge amount of money is flowing into the market every month and new companies' lPOs are coming in the market in a bullish environment. In such an environment, the market is more likely to sustain bullishness.
The full budget of the new government will be presented in the next few days. Budgets will express determination to boost infrastructural development. While the Reserve Bank has subsequently cut interest rates, the environment is already buoyant with the strong arrival of the Sone Pe Suhaga Monsoon. After the rainy season, the festive season will begin. Urban and rural consumption will increase. This factor will also strengthen the boom.
Sensex is at 77000 today. A massive rally of 23000 points is required to reach the unprecedented milestone of one lakh. That is a 30 percent increase! Will this be possible by March 2025?