he week ending September 13, 2024, was characterized by a strong bullish trend across the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Driven by robust global cues and rate-cut optimism from the European Central Bank (ECB) and anticipated decisions by the US Federal Reserve, both indices achieved record highs. The BSE Sensex surged 1,439 points or 1.77%, closing at 82,962.71, while the NSE Nifty 50 soared 470 points or 1.89%, ending near the 25,400 mark. These gains underscored the market’s bullish momentum as global economic recovery prospects became more apparent, with traders anticipating further rate cuts amid easing inflation fears.
Sector-Wise Performance: The bullish run was sector-wide, with notable gains in metals, auto, and real estate stocks. The Metal Index led the surge, jumping nearly 3% over the week, benefiting from rising commodity prices and strong demand recovery in global markets. The Auto Index followed closely, up 2.14%, as the automotive sector showed continued resilience, driven by strong vehicle sales and improved supply chain conditions. Realty, PSU banks, financials, and IT stocks also posted significant gains as investor confidence in the broader economy strengthened.
Key Gainers and Stock Movements: Among individual stocks, Bharti Airtel stood out as one of the top performers, surging nearly 4% during the week due to strong subscriber growth and positive earnings outlooks. JSW Steel, NTPC, Mahindra & Mahindra (M&M), Adani Ports, and Tech Mahindra were also prominent gainers, contributing to the rally. The broad-based nature of the market rise saw only one Sensex stock, Nestle India, close in the red during the week, highlighting the underlying strength across the indices.
Macro Drivers of the Rally: The week’s rally was underpinned by positive macroeconomic data and optimism surrounding corporate earnings. Key domestic inflation and industrial production data (IIP) indicated easing price pressures and a sustained recovery in manufacturing output. The market’s positive response to these figures was amplified by expectations of further interest rate cuts from major central banks, especially with the ECB already signaling a potential easing of policy to support growth.
Further, the resilience in the rupee, despite rising global crude oil prices and a strengthening US dollar, helped alleviate concerns over imported inflation. RBI’s steady hand in managing currency volatility also provided a stable backdrop for equities, with the domestic currency trading within a narrow range.
MidCap and SmallCap Surge: While the large-cap indices garnered attention, the BSE MidCap and SmallCap indices outperformed during the week, with gains of 1.3% and 0.8%, respectively. This rally in mid and small-cap stocks was driven by improved investor sentiment toward emerging sectors and companies. The focus shifted to growth opportunities in sectors such as healthcare, renewable energy, and manufacturing, as investors looked beyond traditional blue-chip investments for higher returns.
Corporate Earnings Outlook: Looking ahead, market analysts are optimistic about the second-quarter earnings season, with expectations that corporate profits will show a sequential improvement. The ongoing recovery in sectors like metals, autos, and IT is likely to reflect positively on corporate balance sheets, further driving the market’s upward trajectory. Additionally, any positive developments on the domestic inflation front or from the Federal Reserve’s interest rate outlook may serve as catalysts for further market gains.
Global Influences and Risks: While the overall market sentiment was bullish, several external risks remain on the radar. Chief among them are global crude oil price fluctuations and their potential impact on inflation and currency stability. Additionally, the looming uncertainty around the Federal Reserve’s interest rate policy, particularly following the US August CPI data, which showed higher-than-expected inflation, could weigh on market sentiment. Any surprise from the Federal Open Market Committee (FOMC) meeting next week could introduce volatility.
In summary, the Indian equity markets exhibited a strong performance for the week ending September 13, 2024, underpinned by broad-based gains across key sectors, supportive macroeconomic data, and optimistic global cues. However, traders should remain vigilant about external risk factors, particularly around oil prices and central bank actions, which could influence the near-term trajectory of the market.
