Nifty hits a new high, soars above 20,250 on GDP boost, FII buying

Multiple brokerages upgrading India further influenced the market sentiment.

The equity benchmark Nifty hit a new high of 20,258 in the early trade on December 1, a day after India reported better-than-expected GDP growth of 7.6 percent in the September quarter.

Returning foreign investors, exit polls which show the BJP having the edge in two states, strong growth in tax collection and improved performance in eight core industries also boosted the market sentiment.

At 10. 13 am, the Nifty was trading at 20,259.90, up 0.63 percent from the previous close, and the Sensex was at 67,431.8, up 0.66 percent.

The 30-pack Sensex, however, is still 500 points away from its all-time high of 67,927, which it hit on September 15.

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Reduced geopolitical tensions have led to optimism with declining US bond yields and a weaker dollar. Analysts anticipate potential rate cuts by the US Federal Reserve following a pause in rate hikes.

Multiple brokerages upgrading India further influenced the market sentiment.

FIIs remained buyers for the fourth straight session, buying around Rs 10,000 crore worth of shares, according to NSDL data. On November 30, they bought around Rs 8,150 crore worth of shares, according to provisional data from National Stock Exchange.

India strengthened its position as the fastest-growing major economy by recording a 7.6 percent GDP growth in the September quarter, mainly led by the robust performance of the manufacturing sector.

The latest GDP data surpassed the Reserve Bank of India's Monetary Policy Committee projection. The economy grew 7.8 percent in the first quarter of FY24 and 6.3 percent in the second quarter of FY23.

In October 2023, the output growth of the eight core industries surged by 12.1 percent, up from 0.7 percent in the year-ago period.

Official data revealed an upward revision in September 2023's output growth to 9.2 percent from the earlier 8.1 percent. August 2023's reading was also revised up to 12.5 percent from 12.1 percent, while July 2023's reading was adjusted upward to 8.5 percent.

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Consistent tax collection growth aided the Centre in managing the fiscal deficit to 45 percent of the FY24 budget estimate in the April- October period. This period also witnessed robust capital expenditure. Expectations suggest the Centre could maintain the deficit within the Budget Estimate of ₹17.87-lakh crore (5.9 percent of GDP) or potentially lower.

Exit polls for the five state elections are expected to favour local equities, with the BJP likely winning the crucial states of Madhya Pradesh and Rajasthan.

Most exit polls, released on November 30, suggest that the BJP is likely to retain Madhya Pradesh and snatch Rajasthan from the Congress.

The Congress is expected to retain Chhattisgarh and cause a huge upset in Telangana, signalling a momentum surge for the opposition in the run-up to the national election in 2024.

The state election results will be declared on December 3.

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