Home Tax News Sensex, Nifty hit record highs: 3 factors fueling this rally on March 01 | News on Markets – Business Standard

Sensex, Nifty hit record highs: 3 factors fueling this rally on March 01 | News on Markets – Business Standard

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Sensex, Nifty hit record highs: 3 factors fueling this rally on March 01 | News on Markets – Business Standard


Markets gained ground on Friday with the S&P BSE Sensex rising over 950 points, or 1.35 per cent to trade at 73,477 levels. The Nifty50, on the other hand, moved up 295 points higher to 22,278 levels in the intra-day trade.


The broader markets, too, logged gains.


As per the technical charts, the Nifty50 found support around the critical level of 21,850 levels. Analysts say a breach of this support level in the near-term could trigger a corrective move, especially if confirmed by a technical bearish pattern the Rising Wedge.


“Confirmation of this breakdown could see Nifty declining towards 21,700 – 21,625 levels. Hence, the upcoming sessions will be crucial in gauging how prices respond around the key support levels of 21900 – 21850. Additionally, the emergence of a fresh sell signal in the RSI Smoothened indicator, along with its average line, suggests a capped upside,” wrote Sameet Chavan, head of research, for technical and derivative research at Angel One.


Meanwhile, here’s what is fueling the rise on Friday:


Faster-than expected GDP growth


The latest number on India’s gross domestic product (GDP) growth, at 8.4 per cent, for the October-December (Q3) quarter beat market expectations. Markets were expecting a growth of 6.5 per cent.

 


The National Statistical Office (NSO) also raised the country’s annual real GDP growth forecast for FY24 to 7.6 per cent from the previous estimate of 7.3 per cent. The GDP report came after the market closing yesterday, prompting fresh investments in the robustness of India’s growing economy.


Analysts at Nomura believe that going ahead growth is likely to remain resilient, especially under the environment of stable global economic outlook.


That said, there are headwinds, including the impact of the general election code of conduct on public capex support, patchy recovery in private capex, weak state of consumption, and ebbing terms of trade advantage for corporates as input costs rise.


“We project GDP growth at 6.1% in 2024 (versus 7.7% in 2023) and 6.2% in FY25 (versus 7.6% in FY24), below the Reserve Bank of India’s (RBI’s) expectation of 7%,” wrote Sonal Varma, managing director and chief India economist at Nomura in a coauthored report with Aurodeep Nandi.


Hopes of interest-rate cut in the US

 


A senior US Fed official said overnight that with inflation easing in the US from its record high, the Federal Reserve is looking to start cutting interest rates over the summer.


That said, the US central bank said that the key to their decision would be how sharply the inflation continues to come closer to their long-term target of 2 per cent.


Following the news, the Nasdaq index rose 144 points to close at a record high of 16,091 points.


Positive cues from Asian markets

 


Taking cues from Wall Street’s solid session, Japan’s Nikkei soared 2 per cent intraday this morning to hit a record high of 39,900.


Elsewhere, Shanghai index remained flat, while Australian index ASX 200 was trading marginally upward with gains of 41 points.


Markets in the Asia-Pacific region, according to Devarsh Vakil, deputy head of retail research at HDFC Securities, will keep an eye out for China’s official PMI reading for February, and assess U.S. China’s PMI data, scheduled for release later today.

First Published: Mar 01 2024 | 11:18 AM IST

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