On Monday, June 3, 2024, the Indian stock went to levels never seen before. A record was set for both the Nifty 50 and Sensex driven by several positive factors. In this blog post, we delve into the four major factors behind this market bull run.
Nifty 50 and Sensex Hit Record Highs
Market Performance Overview
Sensex opened 2,622 higher on Monday at 76,583.29 and made its way steadily before it finally hit 76,738.89 with an increase of 2,778 points. Later on, it closed at 76,468.78 after adding 2,507 points to it.
The same way Nifty 50 commenced 807 digits greater at 23337.90, reached the peak of 23338.70, and stopped trading at 23263.90, a gain of 733 digits.
A market rally, which was widespread, saw the midcap and smallcap indices hitting never-before-seen levels, after each went up by close to 4%.
Key Market Data Table
| Index | Previous Close | Opening | Highest | Closing | Points Gained | Percentage Change |
|---|---|---|---|---|---|---|
| Sensex | 73,961.31 | 76,583.29 | 76,738.89 | 76,468.78 | 2,507 | 3.39% |
| Nifty 50 | 22,530.70 | 23,337.90 | 23,338.70 | 23,263.90 | 733 | 3.25% |
| BSE Midcap | 42,854.83 | 44,560.97 | 44,560.97 | 44,367.67 | 1,512.84 | 3.54% |
| BSE Smallcap | 47,334.56 | 48,973.96 | 48,973.96 | 48,232.30 | 897.74 | 2.05% |
Key Reasons for the Market Surge
1. Exit Poll Results
The positive exit poll results from the Lok Sabha elections were the main cause of the market surge. The results showed that the alliance with the BJP for the National Democratic Alliance (NDA) would win in a landslide by getting more than 350 out of 543 seats. It was even predicted by some polls that they may manage to have over 400 seats.The positive impact on confidence in economic growth became apparent as a result of this prospect for governance. Moreover, there were no election-related ambiguities anymore which helped to encourage investors.
2. Strong GDP Data
The National Statistical Office (NSO) has also vitalized India’s GDP expansion statistics. The GDP growth rate for January to March 2023-24 period stood at 7.8%, surpassing what most people had predicted while the total growth for the year reached 8.2%. Moreover, fiscal deficit was less than expected during 2023-24 at 5.63% of GDP as opposed 5.8% earlier anticipated. Hence forward, these were some good economic indicators that supported the market.
3. Broad-Based Buying
Quite a number of sectors were involved in the rally. The rally observed in the banking, financial, metal, real estate and oil and gas sectors was rife. The Nifty Bank index hit an all-time high of 50,990 after surging anew by over 4%. On the other hand, the Nifty PSU Bank index gained 7%. Additionally, Realty, Metal and Financial Services’ indices rose to about 4%.
4. Positive Global Cues
Positive developments in global markets added to the upbeat sentiment. Hopes for rate cuts in Europe and potentially in the US later this year lifted investor spirits. Additionally, strong macroeconomic data from Asian economies like Japan and South Korea indicated a broader economic recovery.
Indian Stock Market Outlook
Expert Opinions
If the election results on June 4 meet or surpass predictions, several specialists expect that the market rally would last for some time. Apurva Sheth of SAMCO Securities recommended that the Nifty 50 could hit 23,500 in a short period urging traders to capitalize at current levels and re-enter around 23,000 to 22,800 ranges soon. Nifty’s medium-term objective is estimated at about 24,500.
Technical Analysis
The Nifty has strong support a two levels, at 23,200 and from 22,950 to 23,000, immediate resistance at 23,350 and major resistance at 23,500. Market anxiety decreased sharply on India’s volatility index falling by 15% known as India VIX.
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