The Nifty hit the psychological 20,000-mark for the first time in September, while the Sensex is also at a record high. Despite the meteoric rise in stock markets, rising Brent crude price, weak rupee and upcoming elections may take the shine out of equities
Stock markets in India hit a record high on Friday, even as Brent crude climbed to the highest level in 2023 so far. The rupee, too, declined to its 10-month lowest against the US dollar in September itself. Both the factors, elevating crude prices and weakening local currency, are bad news for both the economy and equities. What explains this meteoric rise in stock markets in India despite the headwinds that could throw the rally off track?
Gautam Duggad, head of research, institutional equities, Motilal Oswal Financial Services, attributes the favourable blend of healthy macro and micro, moderating inflation and cooling commodity prices, global interest rates near their peak, and six consecutive months of foreign institutional investors inflows with strong retail participation led by positive sentiment as reasons for the rally in Nifty.