Indian Stocks Accumulate Stellar Returns This Week; Sensex Jumps 1,600 Pts

Indian stock indices closed Friday's trade on a steady note and closed this week on a flyer, defying the latest slump in global markets.

Sensex closed 8 points lower at 75,410 points, and Nifty closed 11 points lower at 22,957 points, both staying around their all-time highs experienced in the previous session.

Last week, Sensex jumped about 2,000 points, on a cumulative basis. During Tuesday to Friday this week, Sensex jumped about 1,500 points.

By creating an unprecedented wealth of USD 1 trillion in just six months, both indices of the Indian stock market BSE and NSE have joined the exclusive USD 5 trillion club, defying the FII (Foreign Institutional Investors) pullout before the outcome of the Lok Sabha election on 04 June.

Data shows this leg of the bull run is fuelled by domestic institutional, retail and HNI (High Net worth Individuals) investors as FIIs have pulled out at least Rs 28,000 crore from the market this month.

Market experts say, assuming market returns are in line with the last 10 to 20 years, and with the expectation of India becoming the third-largest economy by 2027, the market cap of BSE and NSE is expected to reach USD 10 trillion by 2030.

"Global market sentiments remained subdued as the recent US FOMC minutes suggest a continued hawkish stance on policy rates. Meanwhile, the domestic market is reaching new highs, with large caps playing second fiddle to the broader market rally, indicating sustained momentum in the short term. The BSE PSU index has experienced significant rerating due to strong performance and improved visibility, driven by PSU banks and defence stocks," said Vinod Nair, Head of Research, Geojit Financial Services.

The consistent bull run in Indian stock indices, Sensex and Nifty continued and touched fresh highs on Thursday, reacting to Prime Minister Narendra Modi's assertion that the BJP-led alliance is on track to form the government for a record third term.

Shrikant Chouhan, Head Equity Research, at Kotak Securities, said, "The improvement in market sentiment over the past week suggests that market expectations surrounding the ongoing Lok Sabha elections have steadied. Furthermore, better-than-expected 4QFY24 earnings in some key pockets supported momentum." 

Overseas investors have been remaining net sellers of Indian equities for the past several sessions. Interestingly, domestic institutional investors during the same period stayed net buyers, largely making up for the outflows by the foreign investors. (ANI)