The Indian market indices maintained their positive trend and added to their impressive gains from the previous week.
This morning, the benchmark Sensex and Nifty both increased by 0.7%. The indices each gained about 3% last week, which was their greatest gain in months.
A notable event today was the first time the Sensex crossed 65,000 markets. HDFC and HDFC Bank were among the top gainers this morning after their merger. JSW Steel, Ultratech Cements, and Grasim Industries were gainers among the Nifty 50.
“The ongoing rally in global stock markets is primarily driven by the surprising and unexpected strength of the U.S. economy ( 2 per cent GDP growth in Q1 23), in spite of the savage 500 basis points rate hike by the Fed,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“Global markets which had discounted a US recession by mid-2023 have been proved wrong and the markets are now compensating for the excessive pessimistic discounting in 2022.”
An important point of distinction between the rally in the US and in India is that the rise in the former country is primarily being led by tech stocks while here it is more “broad-based”. Continued foreign fund inflow in Indian stocks too buoyed the indices.
“Since the strength of the market momentum is high, the rally can continue; but valuations are getting stretched,” Vijayakumar added. Ajit Mishra, SVP – Technical Research, Religare Broking Ltd., advised investors to continue using the “buy on dips” strategy as long as the Nifty range was between 19,350 and 19,500.