Indian stocks recover from election slump to end at record level

FE Team | Published: June 07, 2024 22:58:09

BENGALURU, June 7 (Reuters): Indian benchmarks closed at record highs on Friday, erasing election-day-related losses, on domestic inflows, political continuity and a projection of faster economic growth.
The NSE Nifty 50 ended 2.05 per cent higher at 23,290.15 points while S&P BSE Sensex closed up 2.16 per cent at 76,693.36.
The Nifty added 3.4 per cent this week, while the Sensex rose 3.7 per cent, recouping all losses made on Tuesday after Prime Minister Narendra Modi's alliance won the general elections by a surprisingly slim majority.
The Nifty saw its best week since early December, while the Sensex recorded its best week in nearly 2 years.
The recovery rally came as domestic buying overpowered foreign sales and as clarity emerged regarding Modi and his allies forming the government over the weekend.
Meanwhile, the Reserve Bank of India hiked full-fiscal gross domestic product (GDP) growth expectations to 7.2 per cent from 7 per cent on Friday, and kept the key borrowing rate unchanged as expected.
"The monetary policy committee has been upbeat on growth and nudged the GDP forecasts higher, while yet being cognizant and cautious of achieving the last mile of disinflation," said Niraj Kumar, chief investment officer at Future Generali India Life Insurance Company, adding that the bump up in growth numbers providedcomfort to equity markets.
All 13 major sub-indexes ended higher on the day, led by US-rate sensitive information technology stocks gaining 3.4 per cent.
The IT index recorded its best week since early May2020, after major central banks kick-started their rate-easing cycle, adding to expectations that the Federal Reserve could follow suit.
The US nonfarm payrolls report, due after the bell, could provide more cues on the trajectory of interest rates in a geography that is a key market for Indian IT companies.