Sensex And Nifty Reach New Record Highs Driven By Market Expectations Of Increased Foreign Inflows

On Thursday (12 September), Indian benchmark indices Sensex and Nifty surged over 1.5 per cent, reaching new record highs, driven by global market gains and expectations of increased foreign inflows.

This optimism followed US inflation data, which raised the likelihood of a 25-basis-point rate cut by the Federal Reserve. The BSE Sensex rose by 1,440 points, or 1.77 per cent closing at 82,962.

The Nifty50 gained 470 points, or 1.89 per cent, finishing at 25,388.9, surpassing its previous record. Market capitalisation for all BSE-listed companies increased by Rs 6.6 lakh crore, totaling Rs 467.36 lakh crore.

US consumer price data for August showed a slight increase, raising expectations for a 25-basis-point Fed rate cut on 18 September. Meanwhile, the odds of a larger 50-basis-point cut dropped significantly.

This fueled gains in Indian IT stocks and other sectors like banking, auto, and financial services, which saw rises of 1-3 per cent.

Key contributors to the Sensex rally included Bharti Airtel, Reliance Industries, HDFC Bank, Infosys, and ICICI Bank. Bharti Airtel, in particular, surged nearly 5 per cent to a 52-week high, significantly boosting the index.

Other factors supporting the market surge included a global rally in equities, a decline in oil prices below $72 per barrel, and a weaker dollar, making Indian equities more attractive to foreign investors.

Additionally, foreign institutional investors (FIIs) infused nearly Rs 17,016 crore into domestic equities in September, further boosting market confidence.