The benchmark Indian Index edged up in Wednesday as the BSE Sensex and the NSE Nifty touched a new record due some positive overseas signals and persistent FII activity. The benchmark Bombay Stock Exchange (BSE) Sensex rose by a record trading high of 85,516 during intraday trade and the National Stock Exchange (NSE) Nifty 50 index also set a new record of trading above 26,100 points.

The rally was not restricted to any specific index, it included sectors like metals, energy and banking stocks. Consumer confidence sustained an optimistic tone amid the recent ‘dovish’ outlook from the US Federal Reserve and projections for additional policy loosening in the next few months.

Experts still feel that the existing tendency may lift the indices even more in the short-term, despite some profit-taking is also possible after such a rally. The Sensex has finally settled at 85,623, higher by 412 points or 0.48% of the previous close.

Nifty ended at 26,134, up by 128 points or 0.49% Higher. Leading the pack of Sensex are Tata Steel which gained over 4 per cent following investors approval for Rs 1,200 crore outlay for setting up a new cold rolling mill complex at Jamshedpur.

Other significant gainer were Bajaj Finance and ICICI bank which up by 2-3%, Reliance Industries & Larsen&Toubro up by 1%. On the flip side ITC, Hindustan Unilever and Nestle India occupied the lower end of the growth slot. On the sectoral front, BSE Metal climbed 3.2 per cent followed by Energy, Oil & Gas and Bankex.

Even the broader markets joined the fund and the BSE Midcap and Smallcap indices rose by 0.7 percent and 0.9 percent respectively. Market breadth was a tad bit positive as 1,925 stocks moved northward while 1,589 stocks to the south on the BSE. FII continued to buy in cash market on net mode on Tuesday with value of Rs. 2,654 crore, as per the provisional number of exchange.

On the domestic front, we saw that Domestic Institutional Investors DINs on the other hand, were sellers for the month at Rs 1372 crore. Several factors contributed to this sustained rally they include; Economic growth was impressive, Inflation rate was coming down and political stability following policy expectations after the general elections.

India also outperformed all the estimates when recently its gross domestic product grew by 8.4 per cent during the October and December quarter, which again boosted confidence amongst the investors for investing in India. The recent correction in prices of crude oil has also allayed some fears about Indias macroeconomic stability. As for the global markets, major American Indices closed on the high side overnight and setting new record high prices.

Asian markets too were trading mostly up as China unveiled new measures to stimulate its economy and its property market in particular. The MSCI Asia Pacific index advanced with the biggest gain since January 2022. At home, investors are waiting for the Reserve Bank of India’s monetary policy review in early April.

Market consensus is that the central bank will maintain a status quo in interest rates however market focus will be on its comments on growth and inflation expectations. The market continues to rally and is already overvalued, according to some analyst concerns. Though most saw correction in the short-term, all expected India to remain one of the fastest-growing large economies in the world in the long-term.

In trading, other aspects that are expected to be monitored as the financial year comes to an end include institutional effects, window dressing by fund managers among others. Now that the benchmark prices are set at best level all eyes and ears are set on whether Sensex will cross 86,000 and Nifty to touch the level 26,500 in the upcoming sessions.

The technical view remains positive from the higher ground, given that Nifty fends off the 25,800support. The next strong resistance levels will appear at 26300 and 26500. In view of this, the favourable returns for FDI in India relative to global markets are further expected to keep foreign investors charged up for IN equities. Existing political stability, continued reforms and bettering corporate earnings are expected to maintain a desired investment environment in India in the medium to long run.