GDP figure droves the Sensex and Nifty to a new high

On March 2nd the BSE market cap topped to 400L Cr resulting the Nifty and Sensex reaching the Lifetime high of  73,819 and 22353 respectively. India’s GDP growth rate for Oct-Dec  was at 8.4% which almost overperformed the estimates forecasted by many banking institution and agencies which propelled the Sensex and nifty to Life time High. This gain resulted the market overall M-cap to all time high of 400L Cr or 4,8 trillion . For overall week investor were cautious and was not too clear about the momentum of the market but the GDP number gave the Investor a reason to turn extremely bullish on Friday. Although the foreign funds were guarded with their trades but the domestic fund gave the push GDP figure  which droved the Sensex and Nifty to a new high. 

India GDP Numbers

India’s economy expanded by 8.4% in the last quarter of 2023 i.e. (Oct-Dec), boosted by strong manufacturing and construction. This exceeded predictions and marked the quickest growth in six quarters. Barclays anticipates a rate reduction by the Reserve Bank of India in the third quarter of 2024.

The country’s GDP growth was driven by a double-digit increase in the manufacturing sector. Fiscal year 2024 estimates have been revised upward to 7.6% from 7%. According to Manoranjan Sharma, Chief Economist at Infomerics Ratings, India is clearly experiencing sustained and robust growth.

Key factors Driving the GDP Number:-

1.Auto Sectors

In February, Indian automotive companies experienced a notable increase in sales, primarily driven by rising demand for two-wheelers and utility vehicles, as indicated by their monthly sales figures. TVS Motors saw a significant surge of more than 6%, while Maruti Suzuki India witnessed a gain of over 3%. Tata Motors also recorded a 3% rise in sales for the day, with Hero MotoCorp and Bajaj Auto both showing a 2% increase.

2.Positive FII Numbers:-

Preliminary data from NSE reveals that Foreign Portfolio Investors (FPIs) divested Rs 3,568.11 crore in domestic stocks on Thursday. Concurrently, domestic institutional investors (DIIs) sold off Rs 230.21 crore worth of Indian equities in the previous session. Throughout February, overseas investors injected a total of Rs 1,539 crore into the local equities market.

3. Technical on the Charts:-

In the initial trading hours, Nifty retained its position above the 22,000 mark, leading to a continuous upward trend in the market throughout the day. Senior Technical Analyst at LKP Securities, Rupak De, highlighted the index’s consolidation breakout and its sustained movement above the moving average, which contributed to a significant market rally.

De pointed out a bullish crossover in the Relative Strength Index (RSI), indicating a positive momentum in the market. The overall sentiment is optimistic, with expectations of investors buying during market downturns. Resistance levels are identified at 22,400-22,600, while support is established at 22,200.

India has adjusted its growth projection for the current fiscal year to 7.6%, up from the previous estimate of 7.3%, indicating a robust economic performance. This could potentially boost Prime Minister Modi’s reelection prospects, as he has prioritized high economic growth in his campaign speeches nationwide.

Modi took to social media to highlight the December growth figures as a testament to India’s economic strength and potential. He has implemented measures to ramp up government spending on infrastructure and provide incentives to boost manufacturing in key sectors like electronics, drones, and semiconductors, aiming to position India competitively against countries like Vietnam and Thailand.

The manufacturing sector, representing 17% of India’s economy, saw a notable expansion of 11.6% year-on-year in the December quarter. Investment growth remained strong, surpassing 10% for the second consecutive quarter, while the construction sector also experienced growth of over 9%. These developments underscore India’s economic resilience and its upward growth trajectory.

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