Investing.com – India’s Nifty 50 and Sensex hit record highs in early trade on Thursday, helped by financial and industrial stocks, while small-cap stocks also lifted sentiment after a key indicator erased all recent losses incurred due to regulatory warnings.
It hit an all-time high of 22,602.50 shortly after the opening, and the all-time record stood at 74,453.82. Both indexes were boosted mainly by gains in industrial and financial heavyweights. HDFC Bank Ltd. (NS:) and NTPC Ltd (NS:) is the leader in both indicators.
Sentiment on Indian markets was boosted as the index, a key indicator of popular small market-cap stocks, rose to a one-month high. The figure effectively erased losses incurred in early March after Indian equities flagged the risk of a potential bubble in the country’s small-cap stock market.
But further gains in Indian markets were capped by anticipation of the Reserve Bank of India’s meeting on Friday, while investors also lay low ahead of the 2024 general elections later in April.
Both Nifty and Sensex consolidated early gains and traded sideways by 10:16 IST (04:46 GMT).
RBI intends to keep rates, CPI and GDP forecast in focus
The RBI index is expected to remain at a nearly six-year high of 6.5% following Friday’s meeting.
But the bank’s forecasts on the inflation path as well as rising inflation will be closely watched for more signals on the health of the Indian economy.
The RBI has repeatedly stressed the need to tighten monetary policy in the face of a potential surge in consumer price inflation, especially amid volatile food and fuel prices.
The recent rise in global oil prices could also potentially contribute to India’s weaker inflation outlook, given that the country is one of the world’s largest oil importers.
But the RBI also maintained a broadly positive outlook for the Indian economy, which has been the fastest-growing major economy over the past two years.
India’s GDP growth is expected to remain around 6-7% in the next financial year.
The RBI is also expected to signal a potential interest rate cut only by mid-2024, a recent Reuters poll showed.
Apart from the RBI, Indian markets are also expected to see some volatility ahead of the 2024 general elections starting later in April.
Incumbent Prime Minister Narendra Modi is widely expected to win a third term, a scenario that represents greater growth potential for Indian markets. Indian and foreign investors have generally welcomed Modi’s pro-business policies over the past 10 years, which have been responsible for India’s stellar economic growth in recent years.