The Nifty gained 137.90 points, or 0.74%, to settle at 18,826 on Friday, surpassing its previous closing high of 18,812.50 on December 1. With overseas funds extending their purchases of local stocks, the risk-on sentiment remained intact, although analysts do not rule out hurdles for the Nifty around the 19,000 mark.
The Sensex, too, went past its previous closing high of 63,284.19 before ending the session at 63,384.58, up 466.95 points, or 0.74%. Both indices are now just 0.3% away from their all-time highs. The Volatility Index or VIX – a fear gauge – declined 2.2% to 10.84, suggesting traders see few downside risks. The indices have advanced 11% since the 2023 lows recorded on March 24, although the climb for the gauges since Jan 1 is just shy of 4%.
Goldilocks Moment?
“It is a good time to be in the market,” said Raamdeo Agrawal, chairman and co-founder, Motilal Oswal Financial Services.
Private Banks Among Top Gainers
“India’s macro and microeconomic factors, from GDP growth forecasts and inflation to private capex and corporate earnings, are aligning favourably to take our markets even higher,” Agrawal said.
Foreign portfolio investors (FPIs) were buyers of Indian shares for the fourth straight session Friday. Overseas funds net purchased shares worth ‘794.78 crore, while domestic institutions bought stocks to the tune of ‘681.33 crore, provisional stock exchange data showed.Private lenders were among the top gainers on the benchmark indices as the Bank Nifty once again surpassed the 44,000 mark in the closing stages of Friday’s trading. The index eventually closed at 43,938.15, up 494.55 points, or 1.14%.
News of finance ministry officials meeting senior executives of Moody’s on Friday to push for a sovereign rating upgrade also aided sentiment on Dalal Street.
Agrawal said if the country’s ratings are upgraded, it would boost foreign fund flows into the country.
“It will have a multiplier effect on India’s credit worthiness and boost overseas borrowing. It’s only a matter of time before India gets upgraded,” he said. At present, Moody’s rating for India is in the lowest investment grade of ‘Baa3’ with a ‘stable’ outlook. This is similar to those assigned by other rating agencies such as S&P and Fitch at ‘BBB-‘.
Fund managers said overseas investors are bullish on India because of superior economic prospects compared with several peers.
“India is the only country at the moment that has the demographics to rival China on the global stage,” said Matthew Culley, co-portfolio manager, Janus Henderson Investors, which manages assets in excess of GBP250 billion.