The 30-share BSE Sensex jumped 494.28 points, or 0.67%, to settle at 74,742.50. During the day, it climbed 621.08 points, or 0.83%, to reach a new intra-day record high of 74,869.30.

“BSE listed companies’ market capitalization has risen 8.4% in 2024 (vs 7.1% for BSE 500) and 53.9% since 1 April, 2023 (vs 42% for BSE 500). This reflects the impact of broad-based upmove in the markets triggered by flows from locals and abroad,” said Dhiraj Relli, MD & CEO of HDFC Securities.

Apart from the improvement in Indian macros quarter after quarter, higher allocation towards equities and new investors entering the markets directly and through mutual funds also boosted the stocks. A portion of the market capitalization increase also stemmed from new listings during this period. Moreover, expectations of sustained turnarounds in companies with large equity bases drove the rise in their market capitalization, Relli explained.

India is currently experiencing a mini-Goldilocks moment due to solid macro and micro conditions, which gives confidence about its long-term uptrend, said Ajay Menon, managing director & chief executive officer-broking & distribution, Motilal Oswal Financial Services. Though, he expects intermittent volatility along the way, driven by notable events like general elections, expensive mid- and small-cap valuations, and potential global macro shake-ups.

“Nifty signed off FY24 with a stellar return of 29%, as India is set to exit FY24 with a GDP growth of 7.6%+ and earnings growth of 20%+,” highlighted Menon. In fact, India has now become the fifth largest country in the world in terms of market cap, driven by record demat account addition and robust domestic equity inflows, he pointed out.

Not just that, even the Indian benchmark indices registered fresh record highs on Monday.

During the Monday trading session, Nifty 50 and Sensex hit 22697.30 and 74,869.30 respectively, which is the highest for both the headline indices since 4 April.

The key growth drivers for the Indian markets include a strong macro environment, policy continuity, and the emergent opportunity to establish India as a major supplier in the global manufacturing supply chains under the China+1 strategy, said market expert Ajay Bagga. “We expect foreign investment flows to ratchet up in the second half of the year,” he added.

Sector-wise, he sees domestic cyclicals outperforming this year, led by financials, real estate, automobiles and auto ancillaries.

Monday’s surge was contributed by the buying seen in oil and gas, auto and auto ancillary and financial stocks. The rise in shares of Reliance Industries Ltd, Larsen & Toubro Ltd, Mahindra & Mahindra Ltd, Maruti Suzuki India, Axis Bank, and NTPC contributed the most to the day’s upsurge.

Strong business updates from Tata Motors, Voltas, Godrej Properties, Info Edge (India) also buoyed investor sentiment.

Initial updates from a few companies indicate strong business outcomes for the March quarter, raising investor hopes for a good finish to earnings for FY24 and its continuing momentum in FY25, said Taher Badshah, chief investment officer at Invesco Mutual Fund.

“Until markets encounter any meaningful negative catalysts, they are likely to continue displaying strength,” Badshah said. While valuations may have become pricey, there’s a prevailing optimism that Q4 performance would be strong given the robust macroeconomic backdrop, further buoyed by likely policy continuity, he added. Badshah believes most of the returns will come in in the first half of 2024. The second half might be less eventful, although not necessarily indicating a correction. The momentum of growth is likely to continue, and without the recent regulatory backlash, it could have been even more pronounced.

According to provisional data from stock exchanges, FIIs sold ₹684.68 crore worth of equities while DIIs bought shares totalling ₹3,470.54 crore.

After around 20% earnings growth last year, DSP Asset Managers expects a compounded annual growth of about 16% in 2024/25, which will be the best growth within emerging markets after the tech-driven cyclical recoveries in Korea and Taiwan.

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Published: 08 Apr 2024, 08:43 PM IST