Sensex and Nifty Reach Record Highs on Expectations of Modi 3.0

Sensex and Nifty Reach Record Highs on Expectations of 

Modi 3.0

The stock market opened with unprecedented gains on Monday, driven by exit polls predicting a decisive victory for the BJP-led NDA coalition. This surge in investor optimism propelled the Sensex and Nifty to new all-time highs.

Sensex and Nifty Surge

The Sensex soared by 1859.88 points, opening at a record 75,821.19, while the Nifty jumped 603.85 points, starting the day at 23,134.55. Remarkably, all 50 companies in the Nifty index saw advances, marking an exceptionally strong market performance. Leading the rally were Adani Ports, Adani Enterprises, Power Grid, Shriram Finance, and NTPC.

Strong Economic Indicators

The buoyant market sentiment was further supported by India's impressive Q4FY24 GDP growth of 7.8%, surpassing expectations and bringing the fiscal year's growth to a robust 8.2%. Varun Aggarwal, founder and managing director of Profit Idea, commented on the positive sentiments driven by the GDP growth but cautioned about potential market volatility as the final election results approach.

Global Market Reactions

The optimism extended to Asian markets, which also reflected the positive trend, buoyed by China's strong manufacturing data. Korea's Kospi surged 1.49%, Japan's Nikkei rose 1.13%, and Australia's ASX200 gained 0.82%. In the US, the Dow Jones and S&P 500 closed higher by 1.51% and 0.80%, respectively, though the Nasdaq saw a slight decline.

Federal Reserve and Inflation Expectations

A softer reading of the Federal Reserve's preferred inflation measure has heightened expectations of imminent rate cuts, further boosting Asian equities. However, geopolitical tensions and US election dynamics remain potential sources of volatility.

Oil Prices and International Markets

Oil prices are also on the rise, reflecting robust investor confidence, as evidenced by the overwhelming demand for Saudi Aramco's $12 billion share sale. In Mexico, Claudia Sheinbaum's projected win for the ruling party Morena suggests continuity in governance, positively received by markets.

Upcoming Economic Indicators

Looking ahead, market participants are closely monitoring key economic indicators, including inflation prints across emerging markets and growth data from various regions. The European Central Bank's policy meeting and the release of the US jobs report will be crucial for providing further market insights.

Relevant Laws and Regulations

The trading and performance of stock markets in India are regulated by several key laws and regulatory bodies:

1. Securities and Exchange Board of India (SEBI) Act, 1992: This act empowers SEBI to regulate the securities market in India, ensuring investor protection and market integrity.

2. Companies Act, 2013: Governs the incorporation, regulation, and dissolution of companies in India, impacting how companies listed on the stock exchange operate.

3. Reserve Bank of India (RBI) Regulations: RBI regulations impact financial markets, particularly through monetary policy which can influence market liquidity and investor sentiment.

4. Income Tax Act, 1961: Tax policies under this act can affect investor returns and market behavior.

5. Foreign Exchange Management Act (FEMA), 1999: Regulates foreign investment in Indian markets, impacting market dynamics and capital flows.

These laws and regulatory frameworks ensure the orderly functioning of the stock markets and protect investor interests, contributing to overall economic stability.