Domestic benchmark indices started the week on a buoyant note and ended at a five-month high on Monday, led by earnings and inflation data. In fact, they have been gaining since April 21, 2023. The 30-pack Sensex gained 2.97% and the 50-pack Nifty gained 2.94% during this period, leaving investors wondering about the gain in the benchmark indices.
On Wednesday, the Sensex opened marginally in the red at 61,932.32 points, while the Nifty opened in the green at 18,300.45 points. Here are 7 key factors that drove the rally on D-Street:
FII Buying
Extending their buying streak to thirteen days, foreign institutional investors started pouring dollars into D-Street. Since the beginning of FY23 the net FII buying has been more than ₹ 22,500 crores, aided by a stronger rupee.
Crude Oil Prices
The prices of the global commodity have cooled down and this has been a big tailwind for India. Crude Oil prices were under pressure earlier, on the back of recession fears.
Upbeat Q4 Earnings
The earnings for the January to March quarter of FY 23 have broadly been in line with analyst estimates, with financial and auto companies driving growth.
“The spread of earnings has been decent with 77% of our (coverage) universe either meeting or exceeding profit expectations. However, growth has been led only by BFSI, Auto and Technology,” Motilal Oswal Financial Services said.
Improving Macro Outlook
“We expect a gradual recovery in domestic consumption over the next 2-4 quarters,” Kotak Institutional Equities’ Sanjeev Prasad said. Analysts find India’s macro outlook encouraging with peaking inflation and improving external sector outlook.
Written by Simran Bafna
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