Stock market today: Nifty50 and BSE Sensex, the Indian equity benchmark indices, rallied strongly in trade on Friday. While Nifty50 went above 25,100, BSE Sensex moved up over 1,000 points. Nifty50 ended the day at 25,112.40, up 319 points or 1.29%. BSE Sensex closed at 82,408.17, up 1,046 points or 1.29%.Indian benchmark indices demonstrated a robust recovery on Friday, ending a three-day decline, primarily driven by financial sector gains following the Reserve Bank of India’s (RBI) revised provisioning guidelines for project financing. The positive momentum, however, faces potential constraints due to ongoing Middle East conflicts.The rally was spearheaded by strong performances in Nifty Bank, Financial Services, Auto, and Metal sectors. The broader market indicators, including Nifty Midcap and Smallcap indices, showed improvement of nearly 0.8% following Thursday’s considerable downturn.Additionally, the total market capitalisation of BSE-listed companies increased by Rs 3.57 lakh crore, reaching Rs 446.37 lakh crore, according to an ET report.
Why stock market rose today? Top reasons
1. RBI Eases Norms for Project FinancingOn Thursday, the RBI issued comprehensive guidelines for project financing, consolidating various existing circulars and standardising regulations across banks, NBFCs, and co-operative banks.“In comparison with the May-2024 draft proposal of 5% standard assets provisioning for under-construction projects, the 1.0%/1.25% provisioning for Infra/CRE projects under the final regulations gives a much-needed breather to project financiers, including REC and PFC,” Emkay Global’s analyst Avinash Singh said.The reduced provisioning requirements are expected to decrease funding expenses for infrastructure and real estate projects, creating advantages for lending institutions.2. Fed Projects Two Rate Cuts in 2025The Federal Reserve maintained current interest rates whilst confirming its forecast of two rate reductions in 2025. Global markets responded favourably to the central bank’s indication of future monetary easing, despite elevated inflation projections.The equity markets found solace in the proposed rate cuts, even as the US faces forecasts of reduced GDP growth (1.4%) and higher inflation (3%) for the upcoming year.3. Dollar Shows WeaknessThe dollar index fell to 98.57, following a 0.34% decrease. This weakening typically benefits emerging market equities, including India, as it encourages foreign investment flows and strengthens the rupee.The US 10-year Treasury yield remained stable at 4.389%, whilst the 2-year yield decreased by 2 basis points to 3.925%.4. Foreign Investors ReturnForeign institutional investors (FIIs) have shifted to net purchasing, acquiring equities worth Rs 1,824 crore in the previous two sessions.Domestic institutional investors (DIIs) maintained their robust purchasing pattern for the twelfth straight day, investing Rs 2,566 crore, thereby providing additional market support.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
