Explained: How did Nifty Jump 1000 Pts in 2 Days?
The equity markets are swinging in green despite the GDP shocker, led by jumps in banking, financial services, metals among many.
Explained: How did Nifty Jump 1000 Pts in 2 Days?
The equity markets are swinging in green despite the GDP shocker, led by jumps in banking, financial services, metals among many. Sensex soared by 600 points to an intraday high of 80,853, while Nifty rose by 0.7% at 24,446. Interestingly, the 30-share barometer gained by 1050 points or 1.3% in the last two trading sessions.
Though India reported a GDP growth of 5.4% in Q2, the bourses have been successful in discounting its perceived repercussions, experts said. While Bank Nifty gained 1%, Nifty Financial Services, Nifty Metal, and Nifty Oil & Gas indices reported gains of 1% each.
In today’s trading session, Banking and financial services lead the pack by being an outperformer. Gautam Shah, Founder, Goldilocks Premium Research, told CNBC-TV18 “Banking is an outperformer, and it is likely to do well. The target for Nifty Bank is 55,000.”
The GDP-Effect
As per experts markets have already discounted GDP numbers and company’s strong fundamentals have averted the possible fluctuations. “The GDP number of last Friday was probably discounted by the market,” said Shah. He added, “Indices’ handling of adverse newsflow indicates internals are strong.”
Outlook on Nifty
Shah says that if Nifty touches above 24,500-mark, the market will again be on track with strong momentum.
Investor sentiments
The recent gains in the benchmark indices can be attributed to expectations of clarity in the upcoming MPC meeting. Shah said, “Market may have bottomed for the near term,” reiterating that confidence could increase further if the Nifty exceeds 24,500.
Vikas Gupta CEO and Chief Investment Strategist at OmniScience Capital highlighted India’s growth in private consumption. Private consumption grew at 6% shrugging off concerns about poor consumer demand. Reduced FII outflows have also stemmed optimism among investors.
What’s next?
Investors will be keeping a close eye on the upcoming MPC meeting that will define India’s economic momentum. Banking and financial services are expected to rally in the near term.
