Nifty 50 rises nearly 1%; why did the Indian stock market gain today?-explained

Stock market today: Indian stock market benchmarks, the Sensex and the Nifty 50, ended higher for the fifth consecutive session on Thursday, April 25, despite weak global cues ahead of the release of the first quarter (Q1) US GDP data.

Most major Asian and European stock markets were down amid lingering concerns over elevated interest rates and geopolitical tensions. Additionally, investors were cautious ahead of the release of US GDP data, a key factor for the US Federal Reserve to consider while deciding monetary policy.

The recent hotter-than-expected inflation numbers have blown off the expectations of a rate cut by the US Fed in the near future. Contrary to the expectations of six rate cuts at the beginning of this year, some experts now believe there may not be any rate cuts for the remainder of this year.

Defying weak global cues, Sensex closed 487 points, or 0.66 per cent, higher at 74,339.44 while the Nifty closed the day with a gain of 168 points, or 0.75 per cent, at 22,570.35 on the monthly F&O expiry day.

Axis Bank, SBI and Dr Reddy's Labs ended as the top gainers in the Nifty 50 index, rising 5-6 per cent. As many as 40 stocks ended higher in the Nifty pack.

Also Read: Top Gainers and Losers today on 25 April, 2024: Axis Bank, State Bank Of India, Kotak Mahindra Bank, LTI Mindtree among most active stocks; Check full list here

It was the fifth consecutive session of gains for the Nifty 50 and the Sensex.

Mid and smallcap indices also ended with healthy gains, mirroring the benchmarks. The BSE Midcap index rose 0.71 per cent.

The BSE Smallcap index hit its fresh all-time high of 47,165.21 during the session before ending 0.54 per cent higher at 47,112.78.

The overall market capitalisation of BSE-listed firms rose to nearly ₹404.1 lakh crore from nearly ₹401.4 lakh crore in the previous session, making investors richer by about ₹2.7 lakh crore in a single session.

Nearly 250 stocks, including ICICI Bank, SBI, JSW Steel, Ambuja Cements, Bharat Electronics, Eicher Motors, Hindustan Aeronautics, Hindalco and Trent, hit their fresh 52-week highs in intraday trade on BSE.

Among the sectoral indices, Nifty PSU Bank surged 3.77 per cent. Nifty Pharma, Healthcare, Metal and Auto indices rose by over a per cent each.

Nifty Bank closed 0.63 per cent higher.

Nifty Consumer Durables (down 0.43 per cent) and Realty (down 0.25 per cent) were the two sectoral indices that ended in the red.

Why did the Indian stock market gain today?

Thursday's gain in the market could be largely attributed to a rally in heavyweight banking firms, including Axis Bank, SBI, and ICICI Bank, after Axis Bank's strong March quarter numbers.

Axis Bank stock, which ended 6 per cent higher at ₹1,127.35, was the top contributor to the gains in the Sensex index. Axis Bank stock rose a day after the lender reported a net profit of ₹7,130 crore for Q4FY24. In the same quarter last year, the bank lost ₹5,728.4 crore.

Also Read: Axis Bank share price rises 6% buoyed by healthy Q4 numbers; should you buy, sell or hold? Here's what experts say

Vinod Nair, Head of Research at Geojit Financial Services, observed that the market breadth was strong on Thursday, with oil prices correcting due to easing conflict in the Middle East and weakening US demand.

"The domestic market was buoyed by the PMI data, with an improvement in discretionary spending. Further, the RBI's regulatory ecosystem on private banks led the PSU banks to outperform. The global market largely traded on a mixed note and is now focused on earning reports, with initial reports suggesting a disappointing outlook for technology stocks, which led to the US yield inching higher," said Nair.

Experts pointed out that the Indian stock market has been rising of late as investors have shifted focus to domestic factors, such as macro numbers and corporate earnings. Moreover, expectations of political stability after the Lok Sabha elections have also underpinned market sentiment.

“Investors placed more bullish bets on the monthly F&O expiry day, which saw benchmark indices rally for the fifth straight session led by gains in frontline banking and metal stocks. Even the fall in other Asian and European indices and US Dow Futures witnessing a sharp fall didn't deter local investors. FII fund outflows have been a concern area. Still, India's strong growth prospects and hopes of a majority win for the ruling party in the upcoming elections have been drawing a lot of domestic investors to take exposure to equities," said Prashanth Tapse, Senior VP (Research), Mehta Equities.

The growing might of domestic investors is another factor behind the resilience of the Indian stock market despite global headings.

Foreign institutional investors have been selling Indian equities, but the heat of that is being mitigated by domestic investors.

"During the last seven days, FIIs (foreign institutional investors) sold equities worth a massive ₹25,853 crore. But the DII (domestic institutional investors) buying overwhelmed this FII selling and the market continued its upward momentum," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, observed.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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