India’s key stock benchmarks closed at record highs on Wednesday, defying the bearish sentiment in other Asian markets. The Sensex hit an all-time high earlier in the day, surpassing its previous high on December 1. The index closed at 63,523.15, up 195.45 points, or 0.31%, from the previous close. The gains were primarily driven by merger-bound HDFC Bank and HDFC, as well as software shares, which paced the overall gains. However, investors remained cautious about market reversals in the near-term.
The positive trend in the Indian stock market stood in contrast to the weak sentiment in other Asian markets. Most major indices in Asia Pacific ended in the red, dragged down by education and tech stocks that mirrored the losses on Wall Street. Despite this, India’s stock market outperformed, reflecting the country’s steady improvement in fundamentals compared to other global markets.
Foreign portfolio investors (FPIs) turned net buyers after two consecutive sessions of selling. FPIs purchased shares worth Rs. 4,013.10 crore in the cash segment, indicating their confidence in the Indian market. Additionally, domestic institutional investors bought shares worth Rs. 550.36 crore.
The positive market sentiment has been supported by consistent foreign and domestic fund flows, improvements in corporate earnings, and attractive valuations. Mid- and small-cap indices have extended their winning streak for the ninth consecutive day, reaching new peaks.
The Nifty, a gauge of the top 50 companies by market value, also performed well. While it was 12 points shy of its all-time high, it did achieve a new closing high. The Nifty closed at 18,856.85, up 40.15 points, or 0.21%, from the previous close. The index’s previous closing high was 18,826.
Nilesh Shah, the managing director of Kotak Mahindra AMC, stated that critics now view India as a fast-moving tiger rather than a slow-moving elephant. He emphasized the steady improvement in India’s fundamentals compared to other global markets.
Overall, the Indian stock market’s positive performance reflects the confidence of investors and the improving economic outlook. Foreign investors have played a crucial role in the market’s rally, with FPIs buying shares worth Rs. 43,492.33 crore since the lows of March 2023. As a result, benchmark indices have climbed 11% in the past three months.
In conclusion, while Asian markets faced bearish sentiment, Indian stock indices closed at record highs due to gains by HDFC Bank, HDFC, and software shares. Foreign and domestic institutional investors supported the market’s upward trend through consistent buying. The positive performance of Indian markets reflects the country’s improving fundamentals and the confidence of investors in its economic prospects.
