As a result of a number of favourable factors, including a solid GDP projection, controlled inflation, and significant purchases by foreign investors, Indian stock indices moved slightly higher on monday morning.
The stock indices are very close to reaching record highs. The Sensex and Nifty were up 0.1 to 0.2% while this report was being written. The fact that the US central bank’s latest monetary policy stance – which finally paused the interest rate after raising it for over a year – also supported investors’ sentiment.
The US Federal Reserve’s monetary policy committee paused the key interest rate in its latest meeting on Wednesday. The policy rate has been maintained at 5.0-5.25 per cent, which was near zero after the outbreak of COVID-19. Barring the latest pause, the US central bank has hiked the interest rate for the tenth consecutive time which was necessitated in the fight against soaring inflation.
“The ongoing rally scaled new closing highs last Friday and is now within sight of a new all-time high, which is 18887 for the Nifty. There are two significant trends in the market now: One, this rally is broad-based with the participation of most sectors except large-cap IT. Two, mid and small-caps are outperforming large caps,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Vijayakumar added the trend is likely to continue in the near term.
“We are now on the verge of making a new high after six months and indications are in the favour of prevailing tone to continue,” said Ajit Mishra, SVP – Technical Research, Religare Broking.
