In a continued surge fueled by optimistic expectations of a U.S. rate cut by March 2024, India’s benchmark Nifty 50 and Sensex indexes achieved new all-time highs on Friday. This development positions them for potentially their longest joint weekly winning streak in nearly six years.
As of 10:04 a.m. IST, the NSE Nifty 50 index exhibited a 0.58% rise, reaching 21,306.05 points, while the S&P BSE Sensex marked a 0.54% increase, touching 70,898.30.
The information technology (IT) index, with significant weightage, recorded an impressive gain of approximately 2%, securing its position among the top sectoral gainers. Notably, IT companies, which derive a substantial portion of their revenue from the U.S., experienced a notable 4.5% surge this week, marking their most robust performance in a month.
This surge follows Federal Reserve Chair Jerome Powell’s acknowledgment of the risks associated with delaying rate cuts, strengthening expectations of a 25 basis point (bp) rate reduction by March 2024. Powell’s dovish commentary on the future rate trajectory has ignited a global rally across stock markets.
Additionally, the metal index observed a 1.8% gain, propelled by an increase in global metal prices amid a weakened U.S. dollar. A declining U.S. dollar renders metals more affordable to holders of other currencies.
For the week, both India’s Nifty 50 and Sensex have registered gains of approximately 1.5%, positioning them for their lengthiest joint weekly winning streak since January 2018. The Nifty is on track for its seventh consecutive weekly gain, accumulating an 11.8% increase over the period, driven by robust domestic macroeconomic data, resuming foreign inflows, a drop in oil prices, and a favorable global interest rate outlook.
Despite the benchmark being in the overbought territory for 13 sessions, achieving record highs in 10 of them, Nagaraj Shetti, senior technical research analyst at HDFC Securities, maintains a positive outlook on the near-term market trend. Shetti suggests the possibility of Nifty reaching the crucial resistance level of 21,550.