The Indian stock market experienced healthy gains in morning trade on Thursday, November 27, with the Nifty 50 reaching a fresh record high of 26,295.55 and the Sensex surpassing its 52-week high of 85,940.24, amid positive global cues.
The Sensex rose over 300 points, or 0.40%, to a one-year high of 85,940, while the Nifty 50 rose by 0.30% to an all-time high of 26,295.55.
The frontline indices, however, pared their gains soon, while the mid- and small-cap indices saw selling pressure due to profit booking.
Around 9:45 am, the Sensex was 180 points, or 0.21% up at 85,789, while the Nifty 50 was at 26,246, up 41 points, or 0.15%. The BSE Midcap and Smallcap indices were flat at that time.
What is driving the Indian stock market?
There are five key factors that have contributed to the gains in the benchmark indices:
1. Rate cut hopes: The market is pricing in rate cuts from the US Federal Reserve and the Reserve Bank of India (RBI) in December. The meeting of the US Federal Open Market Committee (FOMC) is scheduled for December 9-10. The Monetary Policy Committee (MPC) of the RBI will meet on December 3, 4 and 5.
Both central banks may announce rate cuts by 25 basis points each, which will infuse more global and domestic liquidity, supporting market sentiment.
The US Fed’s rate may also weaken the dollar to some extent, which can trigger increased foreign capital inflow to emerging markets, including India.
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