In a display of resilience, Indian equity markets continued their upward trajectory on December 2nd, with both the Sensex and Nifty registering notable gains. This positive momentum comes despite the release of disappointing GDP figures, which showed the economy slowing to its lowest growth rate in nearly two years during the July-September quarter.
The Nifty closed the day up by 0.6 percent at 24,276, while the Sensex climbed 0.58 percent to reach 80,248. This bullish trend was fueled by strong performances in pharma, realty, and auto stocks, with UltraTech Cement, Grasim, Apollo Hospitals, Shriram Finance, and JSW Steel leading the charge on the Nifty.
Interestingly, investors seemed unfazed by the weaker GDP data, with India's 10- and 5-year bond yields dropping to a 30-month low. This suggests that market participants are focusing on other factors, such as the upcoming RBI's Monetary Policy Committee (MPC) meeting scheduled for December 4th. Expectations are that the RBI will maintain its policy rate for the eleventh consecutive time due to persistent inflationary pressures.
The broader market also exhibited strength, with mid- and small-cap indices surging to their highest levels in a month. This indicates renewed buying interest in these segments, which have experienced a decent correction in recent months.
However, not all sectors participated in the rally. Nifty PSU Bank emerged as the sole laggard, dragged down by losses in Union Bank, Bank of India, and SBI.
Market analysts attribute this positive momentum to a combination of factors, including strong performances in specific sectors, the anticipation of the RBI's MPC meeting, and a potential shift in the selling trend observed since late September.
The Indian stock market's ability to defy gravity and post gains despite weaker economic data and lingering concerns is a testament to its underlying strength and resilience. While volatility persists, the recent rally suggests that investors are cautiously optimistic about the future. The upcoming RBI's MPC meeting will be a key event to watch, as it could provide further clues about the direction of the market. As the year draws to a close, investors will be closely monitoring economic indicators and policy decisions to navigate the market's complexities and capitalize on emerging opportunities. This period of cautious optimism underscores the dynamic nature of the Indian stock market and the importance of staying informed and adaptable in the face of evolving economic conditions.
DISCLIMER: Prameya's or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.
