Nifty, Sensex hit record highs, fuelled by financials and Fed rate cut assurance

Stock market news: Benchmark indices NSE Nifty 50 and S&P BSE Sensex continued their upward trajectory, marking record highs for the second consecutive session on Thursday, March 7. The surge was spearheaded by financial sector stocks, buoyed by US Federal Reserve Chair's reassurance of potential rate cuts.

At close, the NSE Nifty 50 and BSE Sensex climbed by 0.09 per cent and 0.05 per cent to 22,493.55 and 74,119.39 respectively. This streak, the strongest in three months, saw each benchmark rallying by approximately 3 per cent over the four weeks.

Analysts at Ambit Capital expressed optimism regarding the ongoing momentum in domestic equities, suggesting historical trends indicate potential sustainability until the upcoming elections. They highlighted banking as the sole sector exhibiting relatively appealing valuations compared to the broader Nifty 50.

Indices linked to the financial sector, including Nifty Financial Services, Nifty Bank, Nifty PSU and Nifty Private Bank, recorded gains ranging from 0.6 per cent to 4 per cent over the week.

Moody's Ratings issued a positive outlook for India's banking system on Friday, echoing sentiments expressed by JP Morgan a day earlier, which indicated no substantial hurdles to deposit growth in the sector.

Despite the overall bullish sentiment, Nifty Smallcap 100 dipped by 2.18 per cent, whileand Nifty Midcap 100 saw a modest increase of 0.36 per cent.  According to Ambit Capital, the profit growth distribution for small- and mid-cap stocks did not justify the elevated valuations witnessed.

(With Reuters inputs.)