Nifty hits fresh all-time high, Sensex rallies over 1,400 points: Key reasons behind the rise

NSE Nifty rose sharply to scale its record high level in Friday's late morning deals. The 50-share pack surged 429 points to trade at 22,126.80 and the BSE Sensex soared 1,444 points to hit a day high of 73,089.40. Both the indexes rose sharply amid strong global cues and budgetary announcements.

Such was the rise in the domestic bourses that around Rs 5.9 lakh crore of BSE market capitalisation (m-cap) was generated. Investor wealth, as suggested by the BSE m-cap, rose Rs 5.89 lakh crore to Rs 385.31 lakh crore compared with a valuation of Rs 379.42 lakh crore recorded in the previous session.

Here are the key reasons behind the stock market rise:

Budgetary announcements

The domestic benchmarks advanced today, buoyed by government's adherence to fiscal prudence in its interim budget. The government, in its interim budget, set a target to narrow its fiscal deficit to 5.1 per cent in fiscal 2025 and reduce its borrowings.

A majority of real estate counter also saw a sharp rise after a new housing scheme announcement for the middle class

Finance Minister Nirmala Sitharaman, in her Interim Budget 2024 speech, mentioned that the Centre will launch a scheme to help deserving sections of the middle class "living in rented houses, or slums, or chawls and unauthorized colonies" to buy or build their own houses.

"The non-populist Budget focused on fiscal consolidation is a big positive. The big allocation for rural housing will benefit all construction-related segments like cement, steel and paints," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Global cues

On the global front, Wall Street equities closed higher overnight and Asian markets opened higher. Investors await US non-farm payroll report for January, due to be released today after Indian market hours. The data will be crucial in guiding the Federal Reserve's timing for the start of its rate easing cycle.

"Global cues are better since the mother market US is appreciating the favourable trends in the US economy after the brief disappointment with the cautious Fed message. It is evident that the US is heading for a soft landing and rate cuts are coming. The near-term risk in the market is the high valuation which can trigger corrections on some negative news. Expect high volatility in the near-term," Vijayakumar further stated.

Strong uptick in index heavyweights

On BSE, index heavyweight stocks such as Reliance Industries Ltd (RIL), Infosys, ICICI Bank and Tata Consultancy Services (TCS) pulled the index higher. RIL, Infosys and ICICI alone contributed positively to the around 538-point climb.

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