Nifty 50 index reached a record high thanks to these stocks

The Nifty 50 index has not left behind in the ongoing global jump of equities. It has jumped to a record high of ₹24,367, a remarkable level considering that it was trading at ₹7,515 in March 2020 as the Covid started.

Indian economy and RBI policies

The Nifty 50 index has soared because of the ongoing strength of the Indian economy, which has become the best performer in the emerging markets. 

Most economists believe that the economy will expand by over 8% this year while China is expected to grow by about 5%. Developed countries like the US and in Europe will grow by less than 3%.

India’s economy has benefited from increased investments by companies that are improving their supply chains by decoupling from China. 

Further, there are signs that the Reserve Bank of India (RBI) will start to cut interest rates either this year or in 2025. The bank has been hindered by the stubbornly high inflation rates in the country.

On the positive side, some emerging and developed world central banks have started to cut rates. In Europe, the European Central Bank (ECB), Swiss National Bank, and the Riksbank have started to cut interest rates.

Several emerging market central banks like in Mexico and Brazil have started the same too. Therefore, there is a likelihood that the RBI will start slashing rates after the Fed cuts, probably in December. 

Stocks do well when central banks are slashing interest rates since bonds become less attractive.

Indian stocks have also jumped as more people in the country have turned to the stock market to generate returns. Recent data shows that the volume has soared to a record high. According to Bloomberg, the daily volume at the country’s two stock exchanges jumped to over $21 billion.

India is also thriving in the options market, where many traders have joined in the past few years. 

The Nifty 50 index also jumped after the recent Indian election that saw Narendra Modi win the third term. Modi is often viewed favourably by market participants because of his investments in the economy. 

Top Nifty index stocks in 2024

Most Nifty 50 index constituents have been doing well this year. The best performer in the index this year is Mahindra & Mahindra, the country’s industrial giant. Its stock has risen because of the rising demand for its vehicles. 

Other Indian manufacturing companies like Bajaj Auto and Tata Motors have also helped to support the Nifty index as they jumped by over 25%.

The other top-performing companies in the Nifty 50 index in 2024 are firms like Shriram Finance, SBI Bank, Tata Steel, and Power Grid. These companies have soared because of their strong financial results.

Not all companies in the Nifty have risen this year. The top laggards in the fund were companies like Kotak Mahindra Bank, IndusInd Bank, Hindustan Unilever, and Asian Paints.

Nifty 50 index analysis

NIFTY chart by TradingView

The weekly chart reveals that the Nifty 50 index has been in a strong bull run after bottoming at ₹7,516 in 2020. It has soared to a record high of ₹24,000, making it one of the best-performing indices globally. 

The index has remained above the 50-week Exponential Moving Average (EMA) while the Relative Strength Index (RSI) has moved above the overbought level. Also, the Stochastic Oscillator has moved above the overbought point.

These oscillators mean that the index has the momentum. Therefore, unless something major happens, the Nifty 60 index will likely continue soaring as buyers target the key resistance point at ₹25,000. This view will be confirmed if the index rises above ₹24,500.