Sensex, Nifty log biggest gains in three months amid supportive global cues

The benchmark Sensex and the Nifty on Friday posted their biggest single-day gains in three months to log a fresh all-time high amid sustained inflows from foreign portfolio investors (FPIs) and supportive global cues. 

The Nifty50 rose 217 points, or 1.14 per cent, to end at 19,189; this was the first close for the index above the 19,000 mark. The 30-share Sensex advanced 803 points, or 1.26 per cent, to close at 64,719.

For both indices, gains on Friday were their biggest since March 31. FPIs pumped in close to Rs 6,400 crore, while domestic institutional investors (DIIs) added another Rs 1,200 crore.

This capped a fourth straight monthly gain for the markets. The Sensex and the Nifty closed 3.5 per cent up each, following a sharp up-move in the past three trading sessions. The broader market midcap and smallcap indices continued to outperform, logging gains of around 6 per cent each in June.

Most European markets rallied over 1 per cent as investors cheered lower-than-expected inflation data. Eurozone inflation fell to 5.5 per cent in June, indicating that rate hikes and fiscal tightening by the European Central Bank (ECB) were beginning to yield desired results. US stock indices too extended gains in early trade on Friday and S&P 500 hit its highest level since April 2022.

“Concerns around inflation and interest rates seem to be abating. Moreover, the latest quarterly earnings announced during the April-May period have been slightly better than expectations, leading to better earnings growth expectations. Also, there has been strong liquidity flow into the market. FPIs have put in more than $10 billion during the April-June quarter. At the same time, from the domestic perspective, SIP numbers continue to be strong and sticky,” said Harsha Upadhyaya, president and chief investment officer-equity, Kotak Mahindra Asset Management Company.

According to experts, apart from the positives on the overall macro level, the jubilation in the market was driven by positive data from the US.

“Global investor sentiment was lifted by a favourable revision in the first quarter US GDP, a fall in jobless claims, and the positive outcome of the Fed’s bank stress test. With positive surprises assisting buoyancy in the global market and the advance of the southwest monsoon, the domestic market succeeded in marching to new highs with renewed strength,” said Vinod Nair, head of research at Geojit Financial Services.

Barring two, all Sensex stocks finished with gains. Mahindra & Mahindra (M&M) rose 4.2 per cent, followed by Infosys, IndusInd Bank, and Sun Pharma, which gained nearly 3 per cent each. For the broader market, the gains were less, with the BSE Midcap and Smallcap indices ending the day’s trade up 0.7 per cent and 0.5 per cent, respectively.