Indian benchmark indices Nifty50 and Sensex, hit new heights, ending on an optimistic note for the seventh consecutive week. The Nifty Bank crossed the 48,200-level for the first time, reflecting the bullish sentiment prevailing in the market, said Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, on the robust performance, citing positive trends in various sectors.

The Sensex rose 970 points to close at an all-time high of 71,484 and Nifty 50 index advanced 274 points to close at record high of 24,457.

Global economic landscape

The US Federal Reserve maintained key interest rates at a 22-year high of 5.25-5.50 per cent, signalling a potential end to rate hikes. While inflation remains a concern, the Fed hinted at three rate cuts in 2024. This decision led to a decline in bond yields, benefitting the Indian markets and attracting Foreign Institutional Investors (FIIs) to the economy.

India's IPO surge

India has emerged as the global leader in IPOs, achieving a record-breaking year with over 100 initial public offerings (IPOs) so far in 2023. Despite global uncertainties, the market has witnessed a surge in IPO activity, underscoring a strong belief in the resilience of the Indian economy. Analysts anticipate this trend to persist into 2024.

Domestic economic indicators

On the domestic front, India's Index of Industrial Production (IIP) reached a 16th-month high of 11.7 per cent in October, driven by growth in the power, manufacturing, and mining sectors. However, retail inflation surged to 5.55 per cent in November, primarily due to an increase in food prices. Wholesale inflation also rose to an 8-month high at 0.26 per cent, returning to positive territory after seven months. The Reserve Bank of India (RBI) kept interest rates unchanged but expressed readiness to take appropriate actions if needed.

Market outlook

Nifty Metal and IT sectors emerged as top gainers. Analysts predict that the market will remain in positive territory in the near term, fuelled by GDP growth, a rising capex cycle and companies demonstrating robust earnings, Nanda noted.

In the face of a bullish market, strategists recommend a "buy on decline" approach. Key resistances are identified at the 21,500-21,600 level for the Nifty 50 index, with a crucial support base at 21,150.

As investors and market participants navigate these dynamic conditions, the Indian market remains poised for continued upward momentum, showcasing resilience amid global economic shifts, Nanda added.