NIFTY50 mere 30 points away from all-time high, NIFTY Bank extends record-breaking run; Here are key factors fuelling the rally

The Indian benchmark indices continued to rise higher in the late afternoon session on Thursday, November 20, amid rally in banking stocks and positive global cues.

Meanwhile, the BSE SENSEX traded 222 points below its record high of 85,978.25, after hitting an intraday high of 85,755.94.

Eicher Motors shares were the biggest contributor, rising 2.7%, followed by Bajaj Finserv (2.33%), Bajaj Finance (2.31%), Reliance Industries (1.9%) and Tech Mahindra (1.72%).

Driven by HDFC Bank (1.26%), Axis Bank (0.97%) and ICICI Bank (0.19%), the Nifty Bank hit another record high level of 59,411.70 on Thursday.  Meanwhile, Nifty India Defence (1%) and Nifty Oil and Gas (0.76%) were the other sectoral gainers.

The broader market was also seen in green, with the Nifty Midcap 100 and the Nifty Smallcap 100 surging 0.35% and 0.13%, respectively.

Here are the factors fuelling the market today

Global market

On the global front, Asian markets were trading higher, led by strong gains in chipmakers after Nvidia’s robust earnings helped ease concerns about an AI-sector bubble.

South Korea's KOSPI and Japan's Nikkei soared 1.88% and 2.77%, respectively. The Shanghai Composite slipped 0.4%, while Hong Kong's Hang Seng was up 0.1%.

On Wall Street, after a volatile session, US stocks ended higher on Wednesday. The S&P 500 rose 0.38%, the Dow Jones Industrial Average advanced 0.1%, and the tech-heavy Nasdaq rose 0.59%.

Foreign fund inflows

After several days of outflows, foreign portfolio investors turned net buyers on Wednesday, November 19.

According to exchange data, on Wednesday, the foreign institutional investors (FIIs) purchased shares worth ₹1,580.72 crore, while the domestic institutional investors (DIIs) bought equities worth ₹1,360.27 crore on a net basis.

India-US trade deal

Investors remain hopeful about the India-US trade deal. On November 18, a senior Trump administration official said that a trade deal between India and the US can be worked out "soon".

The first phase of the proposed India-US bilateral trade agreement (BTA) is 'nearing closure' and would address the hefty 50% tariffs imposed by the Trump administration on Indian goods, in addition to resolving America's market access issues, a government official said this week.

The US has imposed a 25 per cent reciprocal tariff and another 25 per cent on Indian goods entering American markets for buying Russian crude oil.

"We are engaged with the US on the BTA. It has two parts. One part of the negotiations will take time. The other part is a package which can address reciprocal tariffs. We are working on both aspects. The package that can address reciprocal tariffs is more or less near closure, and we should get it soon," the official said.

The official added that the deal is expected to address the issue of a 25% penalty on India; otherwise, the agreement would have no meaning.

India’s GDP growth

State Bank of India (SBI), in its research report this week, said India's GDP growth is expected to reach 7.5% or more in the second quarter of the current fiscal year, mainly driven by robust festive sales triggered by the GST rate cut in late September.

Growth is being supported by a pickup in investment activities, recovery in rural consumption, and buoyancy in services and manufacturing, underpinned by structural reforms like GST rationalisation, which also helped unleash a festive spirit that decisively showcased the triumph of hope over hype, it said.

The government will release the GDP data for the July-September quarter later this month.