stock market: Why is the Indian stock market so booming? Understand these five reasons

Rise in Indian stock market : The Indian stock market saw a strong buying spree on Thursday, May 23, with both the Sensex and Nifty indices hitting new record highs. The Nifty rose 1.66 percent to 22,970, while the Sensex rose 1.63 percent to a high of 75,425.

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Sensex and Nifty have seen this bullish trend since last few days. Due to this, investors are also confused to some extent. Many people are thinking that they should book profit or wait for some more time. Experts have said that five major factors are responsible for this boom in the stock market.

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Awaiting the election results
The current bullishness and level of buying in the Indian market is said to be due to the somewhat expected outcome of the Lok Sabha elections. The market is expecting political stability after the Lok Sabha elections. Therefore, investors are focusing on buying quality shares.

Nifty touching a new record is a sign of possible political stability after the elections. This is not booming. Because, the shares in large cap are increasing,' says V., Chief Investment Strategist of Geojit Financial Services. K. Vijayakumar said.

According to noted stock analyst Bernstein, the Indian stock market may witness a short-term boom in the run-up to the Lok Sabha elections or in the weeks following the results. Nifty is likely to cross the 23000 mark during this period. However, profit booking may occur after this short-term boom.

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RBI's helping hand
Market sentiment seems to have been boosted after the Reserve Bank of India (RBI) announced a record dividend of Rs 2.11 lakh crore to the Center for the financial year 2024. This is positive for the economy, as it will help the government bridge the fiscal deficit for fiscal 2025 and boost infrastructure spending.

Decline in crude oil prices is a positive driver in the market, especially in India, one of the world's largest oil importers. Lower crude oil prices help in controlling inflation and positively impact the fiscal health of the country.

Significant contribution of big banks
India's 10-year bond yields have fallen significantly after the RBI gave mega dividend to the government. Shares of banking giants including HDFC Bank, ICICI Bank and Axis Bank contributed the most to the gains in the Sensex and Nifty 50 indices.

'There has been a sharp decline in bond yields due to less borrowing from the government. A fall in bond yields is positive for banking stocks,' said Vijayakumar. The Nifty Bank index rose nearly 2 percent in intraday trade on Thursday.

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Strong buying by domestic investors
Domestic Institutional Investors (DIIs) have been buying heavily in the Indian market, though foreign institutional investors have pulled out of the Indian market this month. According to the data, DII bought Indian shares worth Rs 38,331 crore in the cash segment till May 22. On the other hand, FIIs have sold shares worth Rs 38,186 crore so far this month.

Technical Components
Soni Patnaik, Assistant Vice President, Equity Derivatives Research, JM Financial Services, said that the Nifty crossed the crucial level of 22800+ on weekly expiry today and could touch the 23000 mark by the end of the month from the current level.

(Disclaimer: The above opinions and recommendations are the personal opinions of analysts, experts and brokerage firms. Read Marathi does not necessarily agree with him. Investing in the stock market involves risk. (Consult qualified experts before taking any investment decision.)

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Share Market