Bulls on Fire! Nifty Tops 23,000, Sensex Hits Record High

On May 24, bullish sentiment propelled the benchmark indices Sensex and Nifty to record highs of 75,582 and 23,004, respectively. As markets continue to scale new heights daily, analysts anticipate that the bullish trend will persist, with Nifty poised to reach 23,150 in the near future.

By the morning, the Sensex had surged by 155.62 points (0.21%) to reach 75,573.66. Simultaneously, the Nifty had gained 35.20 points (0.15%) to stand at 23,002.9. The market exhibited a positive bias, with 1,734 shares witnessing gains, while 1,056 shares experienced declines. Additionally, 100 shares remained unchanged during the trading session.

Angel One's Head of Research, Technical and Derivative, Sameet Chavan, advised traders to remain cautious and avoid taking large overnight positions heading into the weekend. He attributed this recommendation to the continued market volatility stemming from election results.

"We expect the bullish trend to continue, with prices likely to test the 23,150 - 23,250 zone in the next few sessions. On the downside, the previous resistance around 22,750 - 22,800 is likely to act as the next support level," he added.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services also expects the markets bullish trend to continue in the near-term. "What makes this rally healthy is the fact that it is being led by fairly valued largecaps with the overvalued broader market taking a backseat. The trend of outperformance of largecaps is likely to continue," he said."The rally in the Sensex yesterday was triggered mainly by the sudden shift in FII trade from sustained sellers to big buyers resulting in buying of ₹4671 crores. The massive short-covering caused by this sudden change in FII trade contributed to the sharp rally," he added.

Despite experts' optimism regarding the Indian stock market's long-term growth potential, they anticipate volatility in the near term due to its elevated valuations and election-driven caution. Experts attributed the recent rally in the Indian market to significant buying activity by FII (foreign institutional investors).

While major stock indices remained relatively flat, broader markets performed better on May 24th. The BSE Midcap and BSE Smallcap indices surged by up to 0.5%. The India VIX, a measure of near-term volatility, saw a slight increase to the 21 level. In terms of sector performance, Nifty Metal and Nifty Media led the way, climbing up to 0.8%. Conversely, Nifty Pharma and Nifty FMCG lagged behind, each declining by 0.4%.

All major stock market indices in the United States closed in the red overnight. The Dow Jones Industrial Average plunged by more than 600 points on May 23, marking its worst performance of the year. The unexpected surge in the Purchasing Managers Index (PMI) for May, which rose by 3.5 percentage points to its highest level since June 2023, contributed to the market decline. The tech-heavy NASDAQ Composite index and the S&P 500 index both declined on May 23, with the NASDAQ dropping 0.4% and the S&P 500 falling 0.7%.

Asian markets experienced widespread declines this morning, led by Hong Kong and Japan. The Nikkei 225 dropped 1.24% and the Topix fell 0.49%, following the release of inflation data. Japan's core inflation eased to 2.2% from 2.6% in March, meeting expectations. Headline inflation also slowed to 2.5%, down from 2.7% in March. In Hong Kong, the Hang Seng index dropped 1%, while South Korea's Kospi and Australia's S&P 200 indices each declined over 1%.