The benchmark Sensex 25^th June 2024, crossed the historic 78,000 mark for the first time, driven by a sharp surge in private sector bank stocks and sustained buying by foreign portfolio investors (FPIs). This milestone was achieved amid a backdrop of optimism and strong market performance, leading to the best single-day gains for both indices in nearly two weeks.

Key Highlights

• Sensex Performance: The Sensex closed 712 points higher at 78,053, marking a significant achievement in its trading history.
• Nifty-50 Performance: The Nifty-50 also experienced a remarkable rise, closing 184 points higher at 23,721.
• Foreign Portfolio Investors: According to provisional data from the exchanges, FPIs were net buyers of Rs 1,176 crore, with cumulative investments this month totaling Rs 14,828 crore.

Surge in Private Sector Bank Stocks

Leading the charge were private sector banks, which have a high weightage in the Sensex. HDFC Bank, ICICI Bank, and Axis Bank were the top contributors, each rising more than 2.3%. This surge was attributed to strong loan growth expectations, good asset quality, and favorable margins. Additionally, analysts had advised buying these banks due to their previous underperformance compared to public sector banks.

Analysts’ Insights

U R Bhatt, Co-founder of Alphaneeti Fintech: Bhatt highlighted the strong performance of the banking sector and noted that concerns about private sector banks have stabilized. He expressed optimism that the budget will further accelerate growth, indicating potential for markets to reach even higher levels.

Ambareesh Baliga, Independent Market Analyst: Baliga emphasized that there are currently no major negatives impacting the market, with all economic data appearing positive. He remarked that as long as people continue to earn and invest, the market’s upward trend is likely to persist.

Economic Indicators

Improved economic indicators have also bolstered Indian stocks. According to recent RBI data, India recorded a surplus of $5.7 billion in the current account during the March quarter, marking the first surplus in ten quarters.

Market Dynamics

Despite the overall positive trend, the market showed a mixed ratio of rising and falling stocks, with 2,149 stocks falling and 1,747 rising. The broader Nifty Midcap 100 and Smallcap 100 indices also touched new highs during the trading session but closed below their day’s high.

Future Outlook

Looking ahead, the general budget and the June quarter corporate results are expected to guide market direction. Investors will also be closely monitoring economic data from the US and China, along with statements from US Fed officials, to gauge future market movements.

The Sensex crossing the 78,000 mark is a significant milestone, reflecting strong investor confidence and robust economic indicators. With continued FPI investment and positive market sentiment, the Indian stock market appears poised for further growth, contingent on favorable domestic and international economic conditions.