Despite a lacklustre global outlook, the Nifty 50 index hit fresh highs on Thursday, May 23, breaking beyond the 22,800 barrier for the first time. In just 20 days, the benchmark index surpassed its previous high of 22,794.7, which was recorded on May 3, to reach a new record high.
Nifty was up 0.96 percent at 22,814 at 1:21 PM on Thursday, while the Sensex was also trending upward, increasing 0.98 percent to 75,024.45. Nifty Bank beat the primary indices throughout that time, exhibiting gains of more than 1.28 percent.
Possible Reasons Behind Indian Stock Market Rally
Record RBI Dividend Boosts Market
The Reserve Bank of India (RBI) has paid the government a significant dividend of Rs 2.11 lakh crore, which is one of the main factors driving the stock market rise. The government now has an extra 0.3% of GDP in budgetary space thanks to this large financial gain. The government may reduce its budget deficit and even boost infrastructure expenditure with this more fiscal room, which will improve market confidence.
Decline in Oil Prices
The market’s rising momentum might also be attributed to the ongoing fall in oil prices. Oil prices declined as a result of US Federal Reserve statements that hinted to a potential increase in interest rates. WTI prices dropped by 0.4 percent to $77.28 per barrel, while Brent crude futures declined by 0.2 percent to $81.7 per barrel. A decline in Brent crude’s price below $82 per barrel is interpreted as a sign of improving market mood.
These elements working together might provide a favourable environment for the Indian stock market, enabling indices like the Sensex and Nifty to reach all-time highs.