Banks and financials led from the front on the first day of the week, with the Bank Nifty surging 293.90 points or 0.67% to a lifetime high of 44,311.90. The Bank Nifty’s previous high was 44,151, attained in December 2022.
India has also once again become the fifth largest stock market in the world after toppling France.
According to analysts, the bank Nifty has consistently outperformed in recent months, thanks to strong domestic and FII buying interest in financials.
Also read: Monte Carlo Q4FY23 profit surges 55.3% at Rs 19.82 crore, revenue up 45.7%
“Earning momentum continued for banking stocks as most banks reported strong results. Besides, further expansion in margins and asset quality continues to improve. Loan book growth has been healthy across segments,” said Sandeep Gupta, senior group VP and head of dealing & advisory (broking & distribution) at Motilal Oswal.
According to the brokerage, the index is witnessing a strong breakout and may see further momentum to 45,000-46,000 in the coming sessions.
Buoyed by optimism over debt ceiling negotiations that led the US indices to finish on a strong note on Friday, the benchmark indices opened on a strong note on Monday. The Sensex closed up 344.69 points or 0.55% at 62,846.38 while the Nifty50 rose by 99.30 or 0.54% to 18,598.65.
Meanwhile, India leapfrogged France to regain the fifth position among top 10 stock markets globally. India had ceded the position to France back in January but the rebound in Adani Group stocks since the fallout of the Hindenburg report gave a boost to the Indian markets.
Furthermore, a surge in FII buying has also given a fillip to Indian equities. According to CDSL data, FIIs have pumped in Rs 37,317 crore so far this month, as of May 26.
As per provisional data on the NSE, FIIs were net buyers to the tune of Rs 1,758.16 crore on Monday while DIIs pumped in a net Rs 853.57 crore.
India trails Hong Kong, which is at fourth with $5.14 trillion while Japan ranks third with $5.68 trillion in market cap. The US and China remain the top two, with a market value of $44.5 trillion and $10.3 trillion, respectively.
At the same time, France lost more than $100 billion in market value in the week as luxury goods makers LVMH Moet Hennessy, Louis Vuitton and Vivendi saw a rout amid fears of a slowdown in China and the US, reported Bloomberg.
“Growth is the underlying narrative and with India showing good GDP growth numbers, global players are putting money into the markets. As long as the country shows such encouraging numbers, FII confidence will remain high. A compounded growth rate of 7% means doubling the size of the economy in next seven years,” said Deven Choksey, founder and promoter of KRChoksey Group.
Most sectoral indices closed in the green, with consumer durables and metals gaining 1.6% and 1.4%, respectively. However, the IT counter saw sell-off, with all tech firms closing in the red.
“The IT sector’s growth has slipped on account of first-order and second-order implications of prevalent macros. The macro challenges are manifesting into a set of outcomes ranging from cuts in discretionary spending, a delay in decision making, and slower deal ramp-up,” says a note by HDFC Securities’ Institutional Equities Research.
