Sensex, Nifty trade near record high levels: Five reasons why the market is rallying
equity market has seen a decent rally with the benchmark indices Sensex and Nifty hovering around record levels supported by positive global as well as domestic cues. The Nifty50 index touched its all-time high level of 19,567 on Thursday, and has seen a sharp rally of over 15% since its March 2023.
Sensex also hit a record level of 66,064.21. The Nifty rallied 10.5% during the April-June quarter and was the fourth best performing index after Brazil, Japan and Russia.
The index’s stellar performance took its 12-month forward PE from 17.4x at the start of the quarter to 18.6x, which implies a 17.7% premium to its average. The rally was fuelled by upbeat sentiment in the global markets on hopes of a peak in the monetary policy tightening cycle by major central banks, especially the Federal Reserve. Moreover, a strong combination of healthy macro and micro, complemented by a sharp recovery in FII flows also supported the upward momentum. “Indian equity markets are regaining their bullish momentum after a brief period of consolidation.
This upswing can be attributed to the recent release of lower-than-anticipated US CPI numbers, resulting in a significant drop in the US dollar index and a moderation in US bond yields. Additionally, the market has disregarded weak IT earnings as it believes the worst is behind us, and the possibility of near-peak interest rates in the USA is seen as a positive factor for stock markets," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
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