Markets rally continues after Economic Survey release; L&T major driver

Mumbai: Benchmark indices Sensex and Nifty maintained their positive trend on Friday after the release of Economic Survey 2024-25 and buying in Larsen & Toubro post its earnings announcement.

The 30-share BSE benchmark Sensex jumped 790.11 points to 77,549.92. The NSE Nifty climbed 281.2 points to 23,530.70.

India is expected to record GDP growth of 6.3-6.8 per cent in financial year 2025-26 on the back of strong fundamentals, calibrated fiscal consolidation and stable private consumption, said the Economic Survey tabled in Parliament on Friday.

"...the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8 per cent," the survey said.

From the 30-share blue-chip pack, Nestle surged over 4 per cent after the FMCG major reported 4.94 per cent increase in net profit at Rs 688.01 crore for the quarter ended December 31, 2024.

Larsen & Toubro climbed nearly 4 per cent after the infrastructure and engineering major reported 14 per cent rise in consolidated profit after tax to Rs 3,359 crore for the December quarter on the back of higher revenue from operations.

Titan, IndusInd Bank, Maruti and ITC were the other major gainers.

ITC Hotels, Bajaj Finserv, Bharti Airtel and ICICI Bank were among the laggards.

"Elevated valuations and optimistic market sentiments in the US raise the likelihood of a meaningful market correction in 2025. Should such a correction occur, it could have a cascading effect on India, especially given the increased participation of young, relatively new retail investors.

"Many of these investors that have entered the market post-pandemic have never witnessed a significant and prolonged market correction. Hence, if one were to occur, its impact on sentiment and spending may be non-trivial," said the Economic Survey.

Historical data and research suggest that the Indian equity market has been notably sensitive to movements in the US market, the survey said.

"The Nifty-50 has historically shown a strong correlation with the S&P 500, with analysis of daily index returns between 2000 to 2024 revealing that in 22 instances when the S&P 500 corrected by more than 10 per cent, the Nifty-50 posted a negative return in all but one case, averaging a 10.7 per cent decline.

"On the other hand, during 51 instances when the Nifty-50 experienced a correction of over 10 per cent, the S&P 500 exhibited positive returns in 13 instances, with an average return of -5.5 per cent," it added.

In Asian markets, Tokyo settled in positive territory, while Seoul ended lower. Markets in Shanghai and Hong Kong were closed due to holidays.

US markets ended in the positive zone on Thursday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,582.95 crore on Thursday, according to exchange data.

Global oil benchmark Brent crude climbed 0.13 per cent to $76.97 a barrel.

The 30-share BSE benchmark advanced 226.85 points or 0.30 per cent to settle at 76,759.81 on Thursday. The Nifty went up by 86.40 points or 0.37 per cent to 23,249.50.