Domestic Stock Market Jumped To Fresh Highs Due to Robust Economic Data & Unchanged Fed Rate 

Home » News » Domestic Stock Market Jumped To Fresh Highs Due to Robust Economic Data & Unchanged Fed Rate 

The stock market today has been on a roll as the economic data showcases India’s growth story to be intact. The broad market equity indices Sensex and Nifty 50 touched new highs in the early trades today. The BSE Sensex rose to 77145 level while the Nifty 50 surpassed the 23481 mark. Though the market tanked on the day of Poll results, post that, within these two weeks, the market has touched multiple new highs. This indicates the investors’ faith in the NDA government and its business policies. However, today’s jump in the market can be mainly attributed to the release of robust economic data and the Fed meeting outcome. Here are reasons for the stock market rise today. 

Release of Economic Data

The main boost for the market was the easing inflation, which has been reflected through the 12-month low CPI Inflation data. In May 2024, the CPI inflation went down to 4.75%, which has been the lowest in the preceding 12 months. This has been the major turnaround for the market as inflation is coming down and thus the interest rates can be reduced in the upping MPC meet, which is in August. The decrease in inflation also means reduced cost of production better profit margins, higher demands, and overall growth of the economy. Adequate monsoon prediction has also been a driving factor behind the decrease of inflationary pressure.

Another data, which made the investors happy, was the Industrial Production Index Data, which increased by 5% in April mainly fueled by exceptional growth in electric production which rose by 10.2%, and a 6.7% increase in mining activities. 

FED Meeting Outcome

Apart from the domestic economic data, the Fed keeping its rates unchanged in its previous day’s meeting also pushed the market upward. The central bank of the US commented that though the inflation has come down it is still a huge concern. This is why they are not reducing the rates at this moment, however, by the end of the year; at least one rate cut can be expected as indicated by the Fed. 

This decision of the Fed made the domestic equity market in India attractive again for the foreign investors who were selling their investments due to the political scenario at the beginning of this month.  The foreign private investors (FPI) turned buyers yesterday and invested ₹ 57.02 crores in the equity market. This is another boost for domestic investors, which is making the market surge today.  

Sectoral performance

As the market is having positive sentiments today, most of the sectoral indices are also trading in green. The Realty sector and the IT sector are the two top sectors today, which gained the most. With the favorable IIP index data, a boost in the realty sector is inevitable. In the economic data released, it has been indicated that the real estate sector has grown robustly in April and the first quarter. Both demand and supply in this industry have surged in 2024. 


Indian stock market is witnessing a huge boost due to the continuation of the present government, with the political uncertainty calming down, foreign investors are also returning to the markets, and favorable Fed policies and robust economic data are pushing the markets upwards continuously. 



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