Nifty 50, midcaps, Sensex today hit record highs in morning: 5 reasons behind market rally – explained

Stock market today: Indian stock market benchmarks the Sensex and the Nifty 50 hit their fresh all-time highs in early trade on Thursday, April 4.

The Sensex opened at its fresh all-time high of 74,501.73, up almost 1 per cent from its previous close of 73,876.82. On the other hand, Nifty 50 opened at 22,592.10 against its previous close of 22,434.65 and soon jumped about a per cent to hit its fresh record high of 22,619.

Around 9:25 am, the Sensex was 0.54 per cent up at 74,272 while the Nifty 50 was 0.52 per cent up at 22,552.

The BSE Midcap index also hit its fresh all-time high of 40,973.14, rising nearly 1 per cent. The Smallcap index also rose 1 per cent to hit its intraday high of 46,015.16. The all-time high of the BSE Smallcap index is 46821.39 which it hit on February 7 this year.

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Experts pointed out the following five pivotal factors behind today’s market rally:

1. Positive global cues: Most Asian markets clocked healthy gains which influenced domestic market sentiment.

Japan’s Nikkei jumped almost 2 per cent in trade while Korea’s KOSPI rose about a per cent, following overnight gains in the US markets as investors remained optimistic about the US rate cuts.

“Asian shares rallied on Thursday as US rate cuts remained on the menu, even if their timing was unclear, while the yen slid against everything except the dollar and boosted Japanese stocks,” reported Reuters.

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2. Solid gains in the banking stocks: The Nifty Bank index rose over a per cent, giving a boost to market benchmarks. Stocks such as HDFC Bank, Kotak Mahindra Bank and Axis Bank traded with healthy gains.

3. RBI MPC in focus: The market is witnessing a fresh spell of buying after two consecutive sessions of lacklustre trade. Investors’ focus is now on the policy decision by the Reserve Bank of India (RBI) which is due on Friday, April 5.

While the RBI is expected to keep policy rates unchanged, some experts expect hints on rate cuts. Moreover, RBI’s commentary on growth and inflation will be key monitorables.

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4. Optimism ahead of Q4 earnings: India Inc. will start disclosing its March quarter (Q4FY24) earnings in the coming days. Experts expect the numbers to be on a healthy side.

“Q4 results will be the next major trigger for the market from a sectoral and stock-specific perspective. The market expects good results from autos, capital goods, telecom and select pharmaceuticals. Financials, too, will report good results despite some NIM compression and, therefore, are likely to be favoured by investors. IT results will be tepid and, therefore, the management commentary will be more important than the results,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

5. Technical factor: According to Anand James, Chief Market Strategist at Geojit Financial Services, Nifty may move towards 22,700, encouraged by the near maturity of a cup and handle formation.

He, however, added that the inability to clear 22,530, or an outright break of 22,350 could expose the support below at 22,200 and 22,050, followed by 21,810, but a collapse is less expected.

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