Indian Shares Poised for Record High Amid Economic Data Anticipation
Indian stock market set to open at all-time high, buoyed by global gains and domestic inflows. Investors await crucial economic data as Nifty 50 continues its impressive winning streak.
The Indian stock market is poised to reach unprecedented heights as it opens on Friday, August 30, 2024. This surge aligns with gains observed in regional markets, following encouraging U.S. economic data that has alleviated growth concerns. Investors are eagerly anticipating India's quarterly growth figures, which are expected to be released later in the day.
The GIFT Nifty, a derivative product based on the Nifty 50 index, was trading at 25,283 at 08:10 a.m. IST, indicating that the benchmark NSE Nifty 50 will likely surpass its previous record closing high of 25,151.95. This upward trajectory has been fueled by substantial domestic inflows and expectations of potential U.S. interest rate reductions in the coming months.
Remarkably, the Nifty 50 has demonstrated an impressive performance, rising for 11 consecutive sessions. This marks its longest winning streak in nearly two decades, showcasing the resilience and optimism prevailing in the Indian equity markets.
Domestic institutional investors (DIIs) have played a pivotal role in this rally, injecting approximately $6.14 billion into the market during August 2024. This influx has more than offset the outflows from foreign portfolio investors (FPIs), highlighting the growing confidence of local investors in India's economic prospects.
The positive sentiment extends beyond Indian borders, with Asian markets showing gains. The MSCI's broadest index of Asia-Pacific shares outside Japan rose by 0.4%, reflecting a broader regional uptrend. Similarly, Wall Street experienced a favorable session, with the Dow Jones Industrial Average achieving a record closing high, buoyed by robust U.S. economic indicators.
Market participants are now focusing on the upcoming release of the core personal consumption expenditures (PCE) data, which serves as the Federal Reserve's preferred gauge of inflation. This data is crucial in shaping expectations for future monetary policy decisions.
In the domestic arena, all eyes are on India's April-June 2024 growth data, scheduled for release after market hours. A Reuters poll suggests that growth may have moderated to 6.9% year-on-year during this quarter, primarily due to reduced government spending in light of national elections. While this projection falls below the central bank's estimate of 7.1% and the previous quarter's 7.8% growth rate, analysts maintain that the medium-term growth outlook for India remains stable.
Among individual stocks, Reliance Industries is expected to be in the spotlight following key announcements made during its annual general meeting on Thursday. Analysts from Macquarie Capital Securities (India) noted that the lack of tangible progress in Jio and retail spin-offs might disappoint investors, while the company's new energy ambitions could potentially support growth momentum over the next 3-5 years.
In other corporate news, budget airline SpiceJet has been placed under enhanced surveillance by India's aviation watchdog, effective immediately, following a recent audit that revealed certain operational deficiencies. Meanwhile, IT giant Infosys has announced plans to introduce generative AI-powered telco solutions based on Nvidia microservices, showcasing its commitment to technological innovation.
Lastly, the Indian government has made a significant policy decision affecting the sugar industry. Effective November 1, 2024, sugar mills will be allowed to use cane juice or syrup for ethanol production, potentially impacting stocks of major sugar producers like Balrampur Chini Mills, Shree Renuka, Bajaj Hindusthan, and Dwarikesh Sugar.
As India's stock market continues to reach new heights, investors remain cautiously optimistic, balancing the positive momentum with ongoing economic developments and corporate performance.
