India's equity markets scaled new record highs on Friday, buoyed by the release of impressive GDP data and continued foreign fund inflows. The benchmark indices, Sensex and Nifty, witnessed significant gains, reflecting the positive sentiment in the markets.
The 30-share Sensex surged 1,139.04 points to reach an all-time peak of 73,639.34 in late afternoon trade. Similarly, the Nifty 50 climbed 335.85 points to touch its new record high of 22,318.65.
This positive momentum can be attributed to several factors. Firstly, India's economy grew at a faster-than-expected rate of 8.4% in the last quarter of 2023, marking the highest pace in a year and a half. This robust growth figure, released by the National Statistical Office (NSO) on Thursday, surpassed the previous quarter's growth of 7.6% and revised the current fiscal year's (April 2023-March 2024) growth estimate to 7.6%.
Market analysts, like V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, believe that this strong GDP data is the primary driver of the current market rally, providing fundamental support to the ongoing bull run.
Furthermore, India's manufacturing sector also exhibited positive signs, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) rising to a five-month high of 56.9 in February. This indicates an improvement in the sector's health, supported by both domestic and external demand.
Adding to the positive sentiment, foreign institutional investors (FIIs) turned net buyers on Thursday, purchasing equities worth Rs 3,568.11 crore, as per exchange data. This continued inflow of foreign funds further bolstered the markets.
The positive sentiment extended beyond Indian markets, with major Asian markets like Tokyo, Shanghai, and Hong Kong witnessing gains. Additionally, the US markets closed in the green on Thursday.
The global oil benchmark Brent crude also witnessed a slight increase, climbing 0.33% to USD 82.19 a barrel.
In conclusion, a combination of strong domestic economic data, positive global cues, and continued foreign investments fueled the record-breaking rally in the Indian stock market on Friday. Both Sensex and Nifty soared to new all-time highs, reflecting investor confidence and optimism in the Indian economy.