India’s benchmark indices closed at fresh all-time highs on Friday, fueled by sustained buying from foreign portfolio investors (FPIs) and hopes of an imminent U.S. interest rate cut.
The Nifty 50 rose 0.33% to reach 25,235.9, while the Sensex climbed 0.28% to 82,365.77.
According to data from the National Securities Depository Limited, FPIs, who had previously been net sellers in Indian markets, have resumed accumulating shares.
Among the sectoral indices, the pharma, realty, and healthcare sectors were the top performers.
“US Fed Chair Jerome Powell’s statement at Jackson Hole, signaling imminent rate cuts and increased confidence in a soft landing, has boosted emerging markets, including India,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “FPI flows are expected to remain volatile.”
The prospect of rate cuts in the US is seen as a positive for emerging markets like India, making them more attractive to investors. Vinod Nair, Head of Research at Geojit Financial Services, said that global markets are reacting to the possibility of a rate cut in September, with both US and Indian markets regaining recent highs, reflecting continued optimism.
The markets are now keenly awaiting the release of Q1 GDP data, scheduled for later today. In its most recent monetary policy meeting, the Reserve Bank of India projected GDP growth for 2024-25 at 7.2%, with Q1 growth expected at 7.1%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%.
India’s GDP grew by an impressive 8.2% during the financial year 2023-24, maintaining its status as the fastest-growing major economy. This follows growth of 7.2% in 2022-23 and 8.7% in 2021-22, according to official data.
(With agencies input)