Nifty Hits All-Time High After Upbeat Growth Data, Sensex Up 300 Points

Nifty hit a fresh record high on Friday, as faster-than-expected economic growth in the September-quarter added to optimism over the global interest rate outlook.

The NSE Nifty 50 index rose as much as 0.52% to 20,238.45, a new record high, while the S&P BSE Sensex was up 0.44% at 67,286.16, as of 9.35 am.

The Indian economy expanded 7.6% in the September-quarter, faster than the 6.8% forecast in a Reuters poll of economists and the Reserve Bank of India’s estimate of 6.5%, led by manufacturing growth.

“India’s growth outlook remains positive, with various capex initiatives of the government likely to trigger consumption at the bottom of the pyramid,” Pramod Gubbi, founder of Marcellus Investment Management, said.

The expectation that we are at the peak of the interest rate cycle in the US has facilitated the move of flows towards more risky assets like emerging equities, especially India, Gubbi added.

Nifty and Sensex posted their best month in 2023 in November, aided by the return on foreign portfolio investor (FPI) inflows.

FPIs snapped a two-month selling streak in November, adding stocks worth 90 billion rupees ($1.1 billion).

Wall Street equity indexes rose overnight, with the Dow Jones Industrial Average clocking its best month since October 2022, after consumer spending data signalled cooling demand, boosting the rate outlook.

Meanwhile, exit polls for state elections showed a narrow advantage for Bharatiya Janata Party in the key states of Rajasthan and Madhya Pradesh, while the Congress is seen to be leading in Chhattisgarh and Telangana.

“A decisive BJP win will reinforce consensus that the party is on the front-foot for 2024 general elections and likely add another leg of rally to markets,” said three analysts led by Madhavi Arora, lead economist at Emkay Global Financial Services.

India’s general elections are due early next year.