Nifty 50, Sensex today The Indian stock market is expected to open on a positive note on Tuesday, February 20, 2024, following global cues and domestic developments. The Nifty 50 and the Sensex, the two benchmark indices of the Indian stock market, closed at record highs on Monday, February 19, 2024, as investors cheered the progress in the nuclear fusion project and the strong earnings reports from the banking and financial sector.
Nifty 50, Sensex today boosts market sentiment
One of the major factors that boosted market sentiment on Monday was the announcement of the successful completion of the first phase of the nuclear fusion project in South Korea. The project, which is a joint venture between India, South Korea, and the International Thermonuclear Experimental Reactor (ITER) consortium, aims to create a sustainable and clean source of energy by replicating the process that powers the sun and the stars.
The project achieved a major milestone on Sunday, February 18, 2024, when it sustained a nuclear fusion reaction for 10 minutes at temperatures exceeding 150 million°C—nearly 10 times hotter than the core of the sun. This is a significant improvement from the previous record of 30 seconds, set in 2023. The project is expected to enter the second phase in 2025, when it will attempt to generate more energy than it consumes.
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The nuclear fusion project is seen as a game-changer for the energy sector, as it promises to provide a limitless, safe, and carbon-free source of power. The project also showcases the technological prowess and the scientific collaboration of India and South Korea, which are among the fastest-growing economies in the world. The project has also attracted the interest of several global investors, who are keen to tap into the potential of the nuclear fusion market.
Banking and financial stocks led the rally
Another factor that drove the Indian stock market to new highs on Monday was the strong performance of banking and financial stocks, which are among the most heavily weighted sectors in the Nifty 50 and the Sensex. The banking and financial stocks benefited from the positive macroeconomic data, the favorable policy environment, and the robust earnings reports.
The macroeconomic data showed that the Indian economy grew by 8.3% in the third quarter of 2023–24, beating expectations and registering the highest growth rate since the first quarter of 2018–19. The growth was driven by the recovery in the consumption, investment, and export sectors, which were hit hard by the COVID-19 pandemic in 2020–21. The growth also reflected the resilience of the Indian economy, which managed to overcome the challenges posed by the second wave of COVID-19 infections and the subsequent lockdowns in 2021–22.
The policy environment also favored the banking and financial sectors, as the Reserve Bank of India (RBI) maintained an accommodative stance and kept the key interest rates unchanged in its bi-monthly monetary policy review on February 5, 2024. The RBI also announced several measures to support liquidity and credit flow in the economy, such as extending the targeted long-term repo operations (TLTRO) scheme, easing the norms for external commercial borrowings (ECB), and allowing the banks to invest in infrastructure investment trusts (InvITs) and real estate investment trusts (REITs).
The earnings reports from the banking and financial sector also impressed the investors, as most of the major players reported healthy growth in their net profits, revenues, and asset quality in the third quarter of 2023–24. Some of the notable performers in the sector were Tech Mahindra, Tata Capital, HDFC Bank, ICICI Bank, Axis Bank, and SBI.
Other sectors and stocks to watch out for
Apart from the banking and financial sector, some of the other sectors and stocks that are likely to influence the Indian stock market on Tuesday are:
The media and entertainment sector saw a surge in the share price of Zee Entertainment Enterprises Limited (ZEEL) on Monday after the company announced a merger deal with Sony Pictures Networks India (SPNI). The deal, which is expected to create the largest media conglomerate in India, valued ZEEL at Rs. 22,000 crore, a premium of 45% over its closing price on Friday, February 16, 2024. The deal also ended the long-standing feud between the Zee promoters and the minority shareholders, who had accused the former of mismanagement and poor governance.
the consumer durables sector, which witnessed a strong demand for its products in the festive season and the winter season. The sector also benefited from lower input costs, an improved supply chain, and increased rural penetration. One of the leading players in the sector, Whirlpool of India, reported a 25% growth in its net profit and a 15% growth in its revenue in the third quarter of 2023–24, driven by the higher sales of its refrigerators, washing machines, and air conditioners.
The IT sector continued to outperform the broader market as it leveraged its digital capabilities, diversified its client base, and expanded its global footprint. The sector also gained from favorable currency movements, increased spending on cloud, data, and cybersecurity, and the recovery in key markets such as the US and Europe. Some of the prominent names in the sector, such as Infosys, TCS, Wipro, and HCL Technologies, reported double-digit growth in their net profits and revenues in the third quarter of 2023–24.
What is the history of the Indian stock market?
The narrative of the Indian stock market encapsulates a noteworthy odyssey of financial progress in India, tracing its roots to the late 18th century, when the East India Company issued bonds and shares. In the 19th century, formal stock exchanges, including the iconic Bombay Stock Exchange (BSE), were established.
The BSE, which was founded in 1875, is the oldest stock exchange in Asia and the first in India. It started as a group of brokers who met under a banyan tree to trade securities. Today, it is one of the largest and most influential stock exchanges in the world, with over 5,000 listed companies and a market capitalization of over $2.8 trillion.
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The National Stock Exchange (NSE), which was incorporated in 1992, is the youngest and largest stock exchange in India. It was recognized as a stock exchange by SEBI in 1993 and commenced operations in 1994 with the launch of the wholesale debt market, followed shortly after by the cash market segment. The NSE introduced electronic trading, screen-based trading, and dematerialization of securities, which revolutionized the Indian stock market. It also launched the Nifty 50 index, which is the benchmark index for the Indian equity market. The NSE has over 1,800 listed companies and a market capitalization of over $2.9 trillion.
The Indian stock market has witnessed many ups and downs, booms and busts, scams and reforms, and crises and recoveries over the years. Some of the major events that shaped the history of the Indian stock market are:
The first recorded stock market bubble in India occurred in 1863–65, when the shares of the Bank of Bombay soared from Rs. 285 to Rs. 2,652 and then crashed to Rs. 87, wiping out many investors.
The first world war (1914–18) had a positive impact on the Indian stock market, as demand for Indian goods increased due to the war. The BSE Sensex, which was introduced in 1986, reached its first peak of 100 in 1918.
The Great Depression (1929–33) had a negative impact on the Indian stock market as global trade and the economy collapsed. The BSE Sensex fell to its lowest level of 58 in 1932.
The second world war (1939–45) had a mixed impact on the Indian stock market, as the war disrupted normal economic activities but also created opportunities for some sectors such as textiles, steel, and chemicals. The BSE Sensex reached a new high of 176 in 1946.
The independence and partition of India (1947) had a devastating impact on the Indian stock market, as the country faced political turmoil, communal violence, and economic instability. The BSE Sensex plunged to 92 in 1948.
The first post-independence boom (1950–56) occurred in the Indian stock market as the country embarked on a planned economic development with the launch of the first five-year plan. The BSE Sensex rose to 307 in 1956.
The first post-independence bust (1957–58) occurred in the Indian stock market as the country faced a balance of payments crisis, a devaluation of the rupee, and a slowdown in industrial growth. The BSE Sensex fell to 150 in 1958.
The second post-independence boom (1959–61) occurred in the Indian stock market as the country recovered from the crisis with the help of foreign aid, increased exports, and improved agricultural output. The BSE Sensex reached a new peak of 387 in 1961.
The second post-independence bust (1962–63) occurred in the Indian stock market as the country faced a war with China, a drought, and a recession. The BSE Sensex dropped to 197 in 1963.
The third post-independence boom (1966–1966) occurred in the Indian stock market, as the country witnessed political stability, a green revolution, and a liberalization of trade and foreign exchange. The BSE Sensex soared to 640 in 1966.
The third post-independence bust (1967–71) occurred in the Indian stock market as the country faced a war with Pakistan, a devaluation of the rupee, and a nationalization of banks and oil companies. The BSE Sensex slumped to 283 in 1971.
The fourth post-independence boom (1972–75) occurred in the Indian stock market as the country emerged victorious from the war, achieved self-sufficiency in food production, and attracted foreign investment. The BSE Sensex climbed to 550 in 1975.
The fourth post-independence bust (1976–79) occurred in the Indian stock market as the country faced a political emergency, a suspension of civil liberties, and stagflation. The BSE Sensex fell to 378 in 1979.
The fifth post-independence boom (1980–84) occurred in the Indian stock market as the country restored democracy, initiated economic reforms, and benefited from the global recovery. The BSE Sensex reached a new high of $785 in 1984.
The fifth post-independence bust (1985–87) occurred in the Indian stock market as the country faced political assassination, communal violence, and a balance of payments crisis. The BSE Sensex dropped to 454 in 1987.
The sixth post-independence boom (1988–92) occurred in the Indian stock market as the country accelerated economic liberalization, deregulation, and privatization and integrated with the global market. The BSE Sensex rose to 4,467 in 1992.
The Harshad Mehta scam (1992) was one of the biggest stock market scams in India, where a broker named Harshad Mehta manipulated the banking system and the stock market to create an artificial bull run. He was exposed by a journalist named Sucheta Dalal, and the scam led to a crash in the market, a loss of over Rs. 5,000 crore, and a regulatory overhaul by SEBI 14.
The seventh post-independence boom (1993–96) occurred in the Indian stock market as the country recovered from the scam with the help of foreign institutional investors (FIIs), mutual funds, and electronic trading. The BSE Sensex reached a new peak of 6,250 in 1996.
The seventh post-independence bust (1997–98) occurred in the Indian stock market as the country faced the Asian financial crisis, the nuclear tests, and political instability. The BSE Sensex fell to 2,904 in 1998.
The eighth post-independence boom (1999–2000) occurred in the Indian stock market, as the country witnessed a stable government, a peace initiative with Pakistan, and a dot-com boom. The BSE Sensex soared to 6,150 in 2000.
The dot-com bust (2000–01) was one of the biggest stock market crashes in India, where internet and technology stocks collapsed due to overvaluation, speculation, and fraud. The BSE Sensex plunged to 2,594 in 2001.
The ninth post-independence boom (2002-08) occurred in the Indian stock market, as the country enjoyed high economic growth, strong corporate performance, and global liquidity. The BSE Sensex climbed to 21,206 in 2008.
The global financial crisis (2008–09) was one of the worst stock market crashes in India, where the global economy and the financial system faced a meltdown due to the subprime mortgage crisis, the Lehman Brothers bankruptcy, and the credit crunch. The BSE Sensex dropped to 8,160 in 2009.
The tenth post-independence boom (2009–10) occurred in the Indian stock market as the country recovered from the crisis with the help of fiscal stimulus, monetary easing, and domestic demand. The BSE Sensex reached a new high of 21,108 in 2010.
The tenth post-independence bust (2011–13) occurred in the Indian stock market as the country faced the European debt crisis, the US debt ceiling crisis, and domestic policy paralysis. The BSE Sensex fell to 15,135 in 2013.
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The eleventh post-independence boom (2014–20) occurred in the Indian stock market as the country witnessed political change, structural reforms, and a digital transformation. The BSE Sensex rose to 41,953 in 2020.
The COVID-19 pandemic (2020–21) was one of the most unprecedented stock market events in India, where the global and domestic economies and society faced severe disruption due to the outbreak of the novel coronavirus. The BSE Sensex crashed to 25,981 in 2020 and then rebounded to 52,154 in 2021.
Conclusion
The Indian stock market is expected to maintain its bullish momentum on Tuesday, February 20, 2024, as it rides on positive global cues and domestic factors. The Nifty 50 and the Sensex are likely to test new levels as investors remain optimistic about the growth prospects of the Indian economy and the corporate sector. The nuclear fusion project and the banking and financial sector are likely to be the key drivers of the market rally, while the media and entertainment, consumer durables, and IT sectors are likely to provide additional support. However, investors should also be cautious of the potential risks, such as rising inflation, geopolitical tensions, and the COVID-19 variants, which could pose challenges to market sentiment.
