Market rebounds as prospects for a rate decrease strengthen; Sensex and Nifty rise by more than 1%

The domestic equities market recovered quickly from the violent sell-off that occurred last week due to worries over the results of the 2024 general elections. Thanks to strong purchasing across sectors at the session’s fag-end, the local benchmark indexes, the BSE Sensex and NSE Nifty, maintained their gains from this week and finished up by about 1% each on Thursday.

Experts claim that strong global trends drove the purchase, as the likelihood of at least two interest rate cuts by the US Federal Reserve in 2024 has once again increased in response to lower-than-expected US consumer inflation data.

Nifty gained 203.30 points, or 0.92%, to end at 22,403.85, while Sensex closed 676.69 points, or 0.93% higher, at 73,663.72. In the intraday trading session, the Nifty closed at 22,054 while the Sensex reached a low of 72,530. Nifty SmallCap 100 and Nifty MidCap 100 had increases of 0.84% and 0.88%, respectively, in the overall market.

Strong worldwide trends that indicated lower-than-expected US consumer inflation data, which points to at least two rate reduction in 2024, gave the home market a late spike. Exports are increasing despite concerns about the state of the world economy, which has given the heavyweight industries—such as banking, IT, and manufacturing—a boost in confidence in the overall market, according to Vinod Nair, head of research at Geojit Financial Services.

The announcement that new companies have been added to the MSCI index, which is anticipated to bring in additional FPI flows, has cheered the markets at a period when FIIs have been withdrawing money from domestic equities, according to Prashanth Tapse, Senior VP (Research), Mehta Equities. On Thursday, domestic institutional investors purchased shares worth ~2,128 crore, while foreign institutional investors sold shares (net) worth `776 crore.

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