Indian Stock Market News Today: On Friday, August 16, 2024, the Indian stock market indices, namely the Sensex and Nifty 50, experienced an increase of nearly 2% each. The Nifty 50 successfully crossed the 24,500 threshold, while the Sensex exceeded the 80,500 level. This upward movement was widespread across the market, with the BSE Midcap and Smallcap indices advancing by 2%. Consequently, the total market capitalization of companies listed on the BSE rose from approximately 444.3 lakh crore to nearly 451.5 lakh crore, resulting in a wealth increase of over 7 lakh crore for investors within a single trading session.

The Sensex commenced trading at 79,754.85, an increase from its prior closing value of 79,105.88, reaching an intraday peak of 80,518.21. In contrast, the Nifty 50 began at 24,334.85 compared to its previous close of 24,143.75 and climbed to a high of 24,563.90 during the session. Ultimately, the Sensex concluded with an increase of 1,331 points, equivalent to a rise of 1.68%, finishing at 80,436.84. Similarly, the Nifty 50 closed up by 397 points or 1.65% at a final value of 24,541.15.

Only three stocks—Divi's Labs, SBI Life, and Dr Reddy's Labs—concluded the trading session in negative territory in the Nifty 50 index. Conversely, Wipro, Tech Mahindra, and Grasim emerged as the leading gainers within the Nifty 50 index, each experiencing an increase of approximately 4%.

All major sectoral indices on the National Stock Exchange (NSE) recorded significant gains; notably, the Nifty IT index surged by 3%, while the Realty, Media, and Auto indices each rose by over 2%. The Nifty Bank index finished with a gain of 1.6%, whereas the Private Bank and PSU Bank indices closed higher by 1.7% and 1%, respectively.

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Why is the Indian Stock Market Rising Today?

Favorable global indicators appear to have catalyzed widespread purchasing activity in the Indian stock market on Friday. The S&P 500 experienced an increase of nearly 2%, while the Nikkei 225 rose by approximately 3%, both of which positively impacted Indian equities. The Nikkei is poised to achieve its highest weekly gains in over four years, reflecting the upward trends observed in US stocks following recent macroeconomic data that alleviated concerns regarding a potential recession and heightened expectations for a Federal Reserve interest rate reduction in September.

A notable decline in US inflation has also contributed to enhanced market sentiment. Specifically, consumer prices in the United States registered an increase of less than 3% for the first time in nearly three and a half years in July, thereby bolstering anticipations of a forthcoming rate cut.

In July 2024, India's retail inflation increased by 3.54 per cent, marking its lowest level in nearly five years. 

Internationally, stock markets have rebounded significantly following the sell-off on August 5th, which was driven by concerns over a potential recession in the United States and the unwinding of the yen carry trade. Recent data concerning US inflation and unemployment benefits do not suggest that the economy is on the verge of recession.

Conversely, the annual inflation rate of 2.9% and a slight easing in labour market conditions create a favourable environment for a potential interest rate reduction by the Federal Reserve in September, which market participants are now anticipating, stated V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Experts noticed that retail investors buy stocks when prices drop, even though prices are still high. In contrast, foreign institutional investors (FIIs) sold Indian stocks in August. Data from NSDL shows that FIIs sold Indian equities worth 18,824 crores by August 14. They made profits after buying stocks worth 26,565 crores in June and 32,365 crores in July. Domestic investors have recently driven the Indian stock market. The number of investors registered with the BSE is now 18.60 crore. While the long-term outlook for the Indian stock market is positive, experts expect some ups and downs in the short term due to high prices, global tensions, and disappointing Q1FY25 results.

Prashanth Tapse, Senior VP of Research at Mehta Equities, says investors may feel more confident if the Nifty exceeds 24,497. He also noted that Nifty options data shows a trading range between 24,000 and 25,000, with 25,000 being an important resistance level.

Disclaimer: The earlier opinions and suggestions reflect the perspectives of specific analysts or brokerage firms rather than those of InvestorDiary. We encourage investors to consult with qualified professionals before making any investment choices.