Nifty Soars to Fresh All-Time High: Revival of Bullish Sentiment and Earnings Growth
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The Indian stock market witnessed a significant surge on Thursday, with the Nifty touching a record high of 26,285.95, marking its first peak in 14 months. The benchmark index rose by 80.65 points, or 0.31%, exceeding its previous high of 26,277.37 set in September 2024. The Sensex also rallied sharply, reaching 85,843.82 in early trade, inching closer to its September 2024 record of 85,978.25. Market experts attribute the rally to the expected revival of corporate earnings and a favorable macroeconomic environment. Ajay Bagga, a banking and market expert, believes that Indian markets are well-positioned to reclaim their all-time highs. Analysts also note that corporate earnings are expected to improve further in the second half of FY26, aided by benign inflation, recovering consumption, and supportive fiscal and monetary policies. The Nifty's valuation has also become more attractive, trading at 22.3x–22.7x forward earnings, lower than the elevated levels seen a year ago. Technical indicators also highlight a bullish setup, with a sustained close above 26,277 potentially pushing the index towards 26,350–26,500, and a possible extension to 27,000. The market's resilience is also attributed to domestic institutional participation, with mutual fund inflows remaining robust since early 2021. Systematic investment plan (SIP) contributions have hit new highs, helping to offset fluctuations in foreign portfolio flows. Lower valuation premiums compared to Asian peers and India's minimal exposure to AI-heavy sectors have also made the market more attractive to global investors.
