Today Market Update News: 6.5 lakh crore surge in BSE, how can the market be tomorrow, know what experts are saying about it

Indian stock market witnessed a remarkable rally, with the BSE Sensex reaching a new all-time high of 83,000 points. This surge resulted in an increase of over ₹6.5 lakh crore in the market capitalization of BSE-listed companies, which now stands at ₹467.22 lakh crore. The day’s gains were driven by several factors, including a decline in inflation in the United States, expectations of foreign investors returning to the Indian market, and a reduction in crude oil prices. Additionally, the positive response to recent IPOs contributed to the bullish sentiment.

Factors Behind the Market Surge

Decline in U.S. Inflation

One of the primary reasons for today’s market rally is the recent decline in inflation rates in the U.S. This has sparked optimism among investors regarding potential interest rate cuts by the Federal Reserve. Independent analyst Ajay Bagga attributed this surge to the anticipated easing of interest rates during the upcoming FOMC meeting on September 18. Lower interest rates in the U.S. could lead to increased capital inflows into emerging markets like India.

Expectations of Foreign Investment

There is growing optimism about the return of foreign institutional investors (FIIs) to the Indian markets. Analysts believe that the current market conditions, combined with favorable economic indicators, will encourage FIIs to increase their allocations in emerging markets, particularly in India. This influx of foreign capital is expected to sustain the momentum in the Indian equity markets.

Crude Oil Price Reduction

The recent decrease in crude oil prices has also played a crucial role in boosting market sentiment. Lower oil prices can lead to reduced inflationary pressures in India, which is heavily dependent on oil imports. This reduction is likely to benefit various sectors, particularly transportation and manufacturing, enhancing overall economic growth prospects.

Positive Response to IPOs

The strong response to recent IPOs has further fueled the market rally. Investors are showing increased interest in new listings, indicating a robust appetite for equities. This positive trend in the IPO market reflects confidence in the broader economic outlook and is likely to encourage more companies to go public.

Market Performance Overview

The benchmark Sensex closed up by 1.77%, gaining 1,440 points to finish at 82,962. The BSE Midcap and Smallcap indices also saw gains of 1.32% and 0.8%, respectively. The overall market breadth was positive, with a significant number of stocks advancing compared to those declining.

Market Capitalization Reaches New Heights

With today’s rally, the total market capitalization of all BSE-listed companies reached a record high of ₹467.22 lakh crore, marking a 1.4% increase from the previous close. This milestone is a testament to the resilience of the Indian equity markets and the growing confidence among investors.

Expert Insights on Market Trends

Ajay Bagga’s Perspective

Analyst Ajay Bagga emphasized that the anticipation of interest rate cuts by the Federal Reserve is a significant driver of the current market rally. He noted that after a cautious start to September, investors are now looking to increase their allocations in emerging markets, which is positively impacting India’s equity market momentum.

Prashant Tapse’s Analysis

Prashant Tapse from Mehta Equities pointed out that while the recent U.S. CPI data may not be sufficient for aggressive rate cuts, it does indicate potential challenges for future economic growth in the U.S. This scenario could prompt the Fed to consider lowering benchmark rates, which would further support the Indian markets.

Global Market Trends

The positive sentiment is not limited to India; global markets have also experienced an upswing. Despite the U.S. inflation report being slightly higher than expected, traders are optimistic about potential rate cuts by the Fed by the end of 2024. This expectation is likely to influence global capital flows, benefiting emerging markets like India.

China’s Economic Measures

Moreover, Bloomberg reported that China is considering cutting interest rates on $5 trillion in mortgages to stimulate consumption. This move is aimed at alleviating the financial burden on households amid concerns about deflation and weak domestic spending. Such measures could have ripple effects on global markets, including India.

Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.