Sensex, Nifty at record high: Key factors behind bull run

Sensex, Nifty at record high: Key factors behind bull run

Benchmark stock market indices witnessed a bull run on Thursday as the S&P BSE Sensex and NSE Nifty50 soared to all-time highs.

The Sensex touched a lifetime high of 75,407.39, while the Nifty50 also surged to a lifetime high of 22,959.70, up over 300 points during the session.

By 3:13 pm, the Sensex was up by 1,236.21 points, standing at 75,457.27, while the Nifty50 surged by 381 points, reaching 22,978.80.

Vishnu Kant Upadhyay, Assistant Vice President - Research and Advisory at Master Capital Services Ltd said that the stock market saw a bull run, buoyed by significant gains in banking and technology heavyweights.

The top five gainers on the Nifty50 were Adani Enterprises, Axis Bank, L&T, Adani Ports and M&M. On the other hand, the top drags were Sun Pharma, Power Grid, Hindalco, Coal India and NTPC.

The surge on Dalal Street followed the Reserve Bank of India (RBI)'s announcement of a record dividend payout of Rs 2.11 lakh crore to the government, surpassing earlier predictions.

"This dividend payout is expected to assist the government in curbing its fiscal deficit and boosting capital expenditure. Additionally, the recent drop in crude oil prices by nearly 4% this week has raised hopes of a decline in US inflation rates," said Upadhyay.

He further added that this potential dip in inflation might lead the US monetary authorities to cut the key benchmark rate earlier than expected.

Santosh Meena, Head of Research at Swastika Investmart Ltd, said, "The Nifty index surged to a record high following the RBI's announcement of a substantial Rs 2.1 lakh crore dividend to the government. This is a significant macroeconomic boost for the market, impacting the fiscal deficit and bond yields directly."

"The infusion of funds is comparable to an indirect interest rate reduction for the economy, likely resulting in lower bond yields. As numerous investment instruments are tied to government bond yields, this reduction is anticipated to have a broad positive impact across financial markets. The enhanced fiscal position could also lead to upgrades in India's economic prospects," Meena elaborated.

Looking forward, Meena predicted further expansion for the Nifty index, with an immediate target of 23,000 on the horizon and the potential to reach 24,000 as election outcomes draw near.

However, he cautioned that while large-cap stocks are expected to perform well, mid-cap and small-cap stocks may lag behind from this point onward.