Sensex, Nifty hit record highs: 4 factors behind the rally on March 01

The S&P BSE Sensex hit a record high of 73,819, while the Nifty50 touched 22,353 intraday

Stock market highlights: Markets gained ground on Friday with the S&P BSE Sensex rising over 1,300 points, or 1.8 per cent, to hit record high levels of 73,819 in the intraday trade. The Nifty50, on the other hand, surpassed the psychological level of 22,350 to claim new lifetime high of 22,353 during the day.

The 30-share index, eventually, ended at 73,745, up 1,245 points, while the Nifty shut shop at 22,339, up 356 points. Both the indices surged over 1.5 per cent each. CHECK MARKET WRAP HERE

In the broader markets, the BSE MidCap and SmallCap indices ended up to 0.9 per cent higher. 

As per the technical charts, the Nifty remained above 22,000 in the early hours, propelling the market upward throughout the day.

"The index's consolidation breakout, coupled with sustained movement above the moving average, fueled a robust rally. Notably, the Relative Strength Index (RSI) confirmed a bullish crossover, indicating positive momentum in the market. Sentiment is optimistic for potential upward movements, with expectations of buying into dips. On the upper scale, resistance is apparent at 22,400/22,600, while support is placed at 22,200," said Rupak De, Senior Technical Analyst, LKP Securities.
 

Meanwhile, here’s what fuelled the rise on Friday:

Faster-than expected GDP growth

The latest number on India’s gross domestic product (GDP) growth, at 8.4 per cent, for the October-December (Q3) quarter beat market expectations. Markets were expecting a growth of 6.5 per cent.
 

The National Statistical Office (NSO) also raised the country’s annual real GDP growth forecast for FY24 to 7.6 per cent from the previous estimate of 7.3 per cent. The GDP report came after the market closing yesterday, prompting fresh investments in the robustness of India’s growing economy.

Analysts at Nomura believe that going ahead growth is likely to remain resilient, especially under the environment of stable global economic outlook.

That said, there are headwinds, including the impact of the general election code of conduct on public capex support, patchy recovery in private capex, weak state of consumption, and ebbing terms of trade advantage for corporates as input costs rise.

“We project GDP growth at 6.1% in 2024 (versus 7.7% in 2023) and 6.2% in FY25 (versus 7.6% in FY24), below the Reserve Bank of India's (RBI’s) expectation of 7%,” wrote Sonal Varma, managing director and chief India economist at Nomura in a coauthored report with Aurodeep Nandi.

Heavyweights at record highs
Shares of the country's most valuable company in terms of market capitalisation, Reliance Industries (RIL); private sector lender ICICI Bank; automobiles major Tata Motors, and Mahindra & Mahindra; Adani group firm Adani Ports and Special Economic Zone (APSEZ); and Grasim Industries from the Nifty 50 index hit their respective new highs after the benchmark indices scaled new peaks in Friday's intraday trade. READ MORE

Hopes of interest-rate cut in the US
 

A senior US Fed official said overnight that with inflation easing in the US from its record high, the Federal Reserve is looking to start cutting interest rates over the summer.

That said, the US central bank said that the key to their decision would be how sharply the inflation continues to come closer to their long-term target of 2 per cent.

Following the news, the Nasdaq index rose 144 points to close at a record high of 16,091 points.

Positive cues from Asian markets
Taking cues from Wall Street’s solid session, Japan’s Nikkei soared 2 per cent intraday this morning to hit a record high of 39,900.

The index ended 1.9 per cent higher, while ASX200 and Shanghai Composite gained up to 0.6 per cent.

The European markets, too, were moving higher with FTSE and DAX soaring 0.7 per cent and 0.5 per cent, respectively.