Stock Market Hits All-Time Highs Following Favorable Political Climate and Economic Data

Indian stock market benchmarks—the Nifty 50 and the Sensex—reached record-high levels on Monday as early trade showed surge in anticipation of the Bharatiya Janata Party (BJP) winning the Lok Sabha elections. The Sensex hit an all-time high of 76,738.89, rising over 3.8 per cent, while Nifty 50 rose 3.6 per cent to 23,338.70.

The encouraging exit poll results align with predictions of BJP-led National Democratic Alliance (NDA) securing a majority in the aftermath of the Lok Sabha elections 2024. Traders demonstrated positive sentiment with the medium-term target for Nifty set at 24,500 following the rise to 23,500 as the counting commences on June 4.

Nearly 300 stocks hit fresh 52-week highs, reflecting the market’s enthusiastic dive into various sectors including banking, finance, metal, and real estate. The midcap and smallcap indices also escalated to new heights, portraying the broad-based optimism in the Indian stock market.

The market’s trajectory wasn’t solely influenced by exit poll buzz. Latest GDP figures unveiled by the National Statistical Office disclosed a remarkable 7.8 per cent growth in Q4FY24, coupled with a positive full-year growth of 8.2 per cent for FY24. These economic data, alongside the government’s fiscal deficit remaining better than budget estimates, further uplifted market sentiment.

Furthermore, Standard & Poor’s recent revision of India’s rating outlook to positive after 14 years signalled strong macroeconomic fundamentals and heightened government capex. This move from S&P bodes well for India’s future credit ratings, reinforcing investor confidence in the market stability.