The benchmarks of the Indian stock market, the Sensex and the Nifty 50, saw substantial rises on Wednesday, July 3, reaching new all-time highs during the day and closing at new highs.

Sensex touched its all-time high of 80,074.3 during the session, breaking above the coveted 80,000 mark for the first time ever. Additionally, the Nifty 50 reached a new high of 24,309.15.

In the end, the Sensex closed at 79,986.80, up 545 points, or 0.69 percent, while the Nifty 50 closed at 24,286.50, up 163 points, or 0.67 percent.

There can be multiple reasons that drove the Nifty 50 and Sensex to an all time high but these are the few key factors that have greatly contributed to the upsoar – 

 

• Positive Worldwide Cues :

Sentiment at home was impacted by significant increases in important Asian and European markets. The Nikkei in Japan increased by 1.25 percent, and the Hang Seng had a gain of 1.16 percent. During the day, the European markets saw a rise of more than 1.5% in France’s CAC 40 and more than 1% in Germany’s DAX. The dovish remarks made by Federal Reserve Chair Jerome Powell, which stoked expectations that rate reduction is imminent, may have contributed to the surge in world markets. Investors watched the minutes of the most recent Federal Reserve meeting for clues about when the US central bank will begin reducing interest rates.

 

• Gains from Financial Stocks :

The stocks of the following banks finished as the top five contributors to the gains in the Sensex index: SBI, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and HDFC Bank. Benchmark indices place a lot of weight on banking equities, so large gains there inevitably help the main indices.

Owing to a possible increase in its weighting in the MSCI Emerging Markets index, HDFC Bank spearheaded the recovery.

HDFC Bank now has a weight of about 3.8% in the MSCI EM Index, according to Nuvama Alternative & Quantitative Research. There might be a large shift in the weight from 3.8% to 7.2% to 5.5% if FIIs lower their ownership from 55.5% to less than 55%, which might result in inflows of

Furthermore, a number of analysts think that big private sector banks currently have solid fundamentals and reasonable values. Both domestic and foreign investors may show interest in purchasing this.

The Nifty Bank index closed 1.77 percent higher at 53,089.25 after reaching a new record high of 53,256.70. The PSU Bank index increased by 1.06 percent, while the Nifty Private Bank index surged by 2.02 percent. 1.80% was added to the Nifty Financial Services index.

 

• Support from Domestic Institutional Investors (DIIs) :

Since August of last year, domestic investors have continuously purchased Indian equities despite unpredictable international inflows.

FIIs turned into net buyers in June, purchasing Indian stocks valued at about ₹2,037 crore, after selling in April and May. DIIs, on the other hand, invested ₹28,633 crore in Indian stocks.

 

• Technical Elements:

Following a gap-up opening, the market comfortably traded above the 24,200/79,600 resistance line, which is mostly favorable, according to Shrikant Chouhan, Head Equity Research at Kotak Securities.

 

According to Chouhan, it is maintaining higher high and higher low formation on intraday charts, supporting a continuation of the present levels’ upward trend.

“We are of the view that, as long as the index is trading above 24,200/79,600, the bullish structure is likely to continue. Above the same, the market could rally up to 24,400/80,200. Further upside may also continue, which could lift the index up to 24,500/80,500. However, below 24,200/79,600, the texture could change,” said Chouhan.

In summary, the Indian stock market has reached unprecedented heights due to a combination of positive global cues, strong performances from financial stocks, robust support from domestic institutional investors, and favorable technical indicators. These factors have collectively contributed to the new benchmarks set by the Sensex and Nifty 50.

As the market continues to show bullish trends, it presents a promising opportunity for investors. Whether you’re a seasoned trader or just starting your investment journey, now is an excellent time to consider participating in the market’s growth.

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