1. Nifty surged over 1%, hitting a record high of 22,852 on May 23.
2. Key drivers included strong Q4 earnings, RBI’s record dividend payout, and election certainty.
3. Sensex also gained 757 points, rising 1% to 74,978.

Mumbai, May 23: Nifty rose over 1 percent today, hitting a fresh high of 22,852 on May 23, driven by several key factors, including Q4 earnings meeting estimates, the Reserve Bank of India’s (RBI) record dividend payout, and increased certainty around the election results.

The Sensex also saw significant gains, rising by 757 points or 1 percent to reach 74,978.

The Nifty 50 index was up by 229 points, reaching 22,827. In total, around 1,639 shares advanced, 1,641 shares declined, and 115 shares remained unchanged, showcasing a mixed market sentiment.

Key Drivers Behind Nifty’s Surge

RBI’s Record Dividend Payout

One of the primary catalysts for Nifty’s new all-time high was the Reserve Bank of India’s announcement of a record ₹2.11 lakh crore dividend payout. This substantial surplus is anticipated to aid the government in managing its fiscal deficit.

Aditi Nayar, ICRA’s chief economist, noted the significant impact of this payout, stating, “The higher-than-budgeted RBI surplus transfer would help to boost the government of India’s resource envelope in FY2025, allowing for enhanced expenditures or a sharper fiscal consolidation than what was pencilled into the Interim Budget for FY2025. Increasing the funds available for capex would certainly boost the quality of the fiscal deficit.”

This infusion of funds from the RBI is seen as a major positive for the markets, providing the government with greater financial flexibility to invest in infrastructure and other critical areas, which in turn is expected to stimulate economic growth.

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Election Results

Another factor contributing to the market’s optimism is the ongoing Lok Sabha elections. Investors are increasingly hopeful of a favorable outcome, particularly a win for the BJP, which is perceived to bring stability and continuity to economic policies.

The initial nervousness observed due to the voter turnout in the first five phases of the elections has given way to a more confident outlook among market participants.

This political certainty is seen as a stabilizing force, encouraging investors to increase their exposure to equities.


Sectoral Performance

Nifty Bank was a significant performer, jumping 1.6%, while PSU rail and defense stocks also saw impressive gains. Garden Reach Shipbuilders & Engineers (GRSE), Cochin Shipyard, and Mazagon Dock rose by up to 20%. Similarly, PSU rail stocks such as Rail Vikas Nigam Limited (RVNL) and Indian Railway Finance Corporation (IRFC) were trading 7-8% higher.

Market Sentiment

The overall market sentiment was buoyant, with strong performances in key sectors reinforcing the positive outlook. The balance of advancing and declining shares, along with the steady number of unchanged shares, indicated a market that is processing a mix of optimism and caution.

In conclusion, the combination of a substantial RBI dividend payout and increasing confidence in the political landscape has driven Nifty to new heights.

These developments have bolstered market sentiment and are expected to continue influencing market movements in the near term.

As investors remain focused on these positive indicators, the markets are likely to maintain their upward trajectory, provided no unforeseen disruptions occur.