Sensex hits all-time high, gains over 1,200 pts; Nifty tops 22,330; what fuelled market rally today?

Stock market today: Bulls had a gala time on Dalal Street on Friday, March 1, as better-than-expected GDP numbers for the December quarter (Q3 FY24) boosted investor sentiment in a big way. The Indian economy grew by 8.4 per cent during the third quarter of the current fiscal year, much above the analysts' estimates of 6.6 per cent.

Further, in-line US inflation data, too, aided the sentiment. 

US prices picked up in January, but the annual increase in inflation was the smallest in nearly three years, keeping a June interest rate cut from the Federal Reserve on the table. The personal consumption expenditures (PCE) price index rose 0.3 per cent last month, Reuters reported. Economists polled by Reuters had forecast the PCE price index climbing 0.3 per cent on the month and increasing 2.4 per cent year-on-year.

After starting the session on a strong note, the benchmark indices continued their upward journey and hit their respective fresh peaks.

At the close, the S&P BSE Sensex stood at 73,745.35, up a whopping 1,245.05 points, or 1.72 per cent, while the broader Nifty50 gained 355.95 points, or 1.62 per cent, to close at 22,338.75. 

Heavy buying was witnessed in financials, auto, metals, FMCG, and oil & gas counters, which supported the headline indices.

"Some big growth numbers have been announced. Real GDP grew 8.4 per cent year-on-year (YoY) in the quarter ending December, much higher than market expectations of 6.6 per cent. Not just that, growth in the previous two quarters (1HFY24) has been revised up to 8.1 per cent (from 7.7 per cent previously). All of this indicates that India is growing at an incredible pace," said a report by HSBC.

The brokerage further said that it prefers to look at GVA growth over GDP growth as a measure of actual growth dynamics on the ground.

"There was some softening in momentum in the December quarter. But data from January and February suggests that the growth momentum has bounced back up. As such, India remains an oasis of strong growth and macro stability in a volatile global backdrop," HSBC added.

Meanwhile, foreign investors (FIIs/FPIs) net bought shares worth Rs 3,568 crore on February 29, while domestic institutional investors (DIIs) sold shares worth Rs 230 crore, as per FII/FPI & DII trading activity on the NSE.

In the broader market, the Nifty Mid Cap 100 traded above half a per cent higher, and the Small Cap 100 was up over 0.30 per cent. High-beta Nifty Bank also gave support to the headline index by climbing 1.57 per cent to 46,847.3. 

Oil marketing companies (OMCs) gained in the trade. BPCL, IOC, and HPCL rose between 3.32 per cent and 2.04 per cent after HSBC reiterated its "buy" rating on the three companies and raised target prices, citing medium-term benefits from refinery upgrades, improved fundamentals, and reduced government intervention.

Financials added over 1 per cent; public sector banks soared 0.98 per cent and the private bank index was up 1.67 per cent. 

Nifty Metals climbed 2 per cent, led by a similar increase in Hindalco Industries. CLSA upgraded the stock to "buy" from "underperform", citing favourable valuations after the recent correction. The stock has shed 18 per cent in the first two months of 2024.

The Nifty Auto index was up 1.14 per cent amid the release of February sales figures.

Among individual stocks, Suven Pharmaceuticals zoomed 13 per cent after the company said it would merge with Cohance Lifesciences in an all-share deal to scale up its contract and development manufacturing services business.

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