Indian Stock Market Surge: 5 Key Factors Driving Today’s Rally in Sensex & Nifty

<ul>
  <li>The Indian stock market experienced strong buying interest on Thursday, May 23, leading the benchmarks, the Sensex and the Nifty 50, to their fresh record high levels.</li>
  <li>The Nifty 50 opened at 22,614.10 against its previous close of 22,597.80 and jumped 1.8 per cent to hit its fresh record high of 22,993.60 during the session.</li>
  <li>"The Nifty hitting a new record is the market’s message of political stability after the elections. The rally is healthy since it is led by fairly valued large-caps," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.</li>
</ul>
<p><strong>The Indian stock market soared to new heights on May 23, driven by strong buying interest and easing election-related jitters. Discover the key factors behind this surge.</strong></p>
<h2><strong>Easing Election-Related Jitters</strong></h2>
<p>Ebbing election-related jitters are keeping the market in the green zone. As the market expects political stability after the Lok Sabha elections, investors are focusing on buying quality stocks, as the medium—to long-term outlook of the market remains positive.</p>
<h3><strong>Macro Factors</strong></h3>
<p>The market sentiment appears to have got a boost after the Reserve Bank of India (RBI) announced a record ₹2.11 lakh crore dividend to the Centre for FY24. This is positive for the economy as it will help the government meet its fiscal deficit target for FY25.</p>
<h3><strong>Gains in Banking Heavyweights</strong></h3>
<p>Shares of banking heavyweights including HDFC Bank, ICICI Bank, and Axis Bank emerged among the top contributors to the gains in the Sensex and the Nifty 50 index following a significant fall in India's 10-year bond yields after the RBI's mega dividend payout to the government.</p>
<h3><strong>Strong Buying by Domestic Investors</strong></h3>
<p>Domestic institutional investors (DIIs) have been strongly buying in the Indian market even as foreign institutional investors have been offloading Indian equities this month. Data show that DIIs bought Indian stocks worth ₹38,331 crore in the cash segment until May 22. On the other hand, FIIs sold stocks worth ₹38,186 crore in cash this month so far.</p>
<h3><strong>Technical Factors</strong></h3>
<p>Soni Patnaik, assistant vice president of equity derivatives research at JM Financial Services, pointed out that the Nifty 50 crossed crucial resistance of 22,800+ levels at the weekly expiry today and it can head towards the 23,000 mark by the month-end expiry from current levels.</p>
<h3><strong>Conclusion</strong></h3>
<p>The Indian stock market's surge to record highs on May 23 is attributed to easing election-related jitters, macroeconomic factors, gains in banking heavyweights, strong domestic investor buying, and favorable technical indicators. Investors should remain cautious and consult certified experts before making any investment decisions.</p>