Nifty 50 Soars to Record High of 26,280 on Rate-Cut Optimism and FII Revival

New high after 14 months

The Nifty 50 crossed its September 2024 peak of 26,277, marking the first time in 14 months that the index has scaled a new all-time high. The move reflects a shift in sentiment after months of consolidation, weak earnings and foreign outflows that had capped earlier gains.​

Traders and analysts attribute the breakout to a confluence of positive factors: improving domestic earnings momentum, reasonable valuations post-correction, tax cuts announced by the government, and—most importantly—rising confidence that both the US Federal Reserve and Reserve Bank of India will ease monetary policy in December.​

Domestic and global tailwinds

On Wednesday, the Nifty closed at 26,205, up 1.24%, marking its strongest single-session gain in five months. Thursday's opening surge was backed by firm GIFT Nifty futures near 26,436, signalling strong positive sentiment even before the cash market opened.​

Global markets also supported Indian equities, with Asian indices up around 0.4% after a three-session rally of 3%, driven by expectations that the Fed will cut rates in December. Softer US Treasury yields and a weaker dollar have enhanced the appeal of emerging markets like India for foreign investors, many of whom had stayed on the sidelines during the recent correction.​

Foreign flows turn positive

A key driver of renewed confidence has been the turnaround in foreign institutional investor (FII) sentiment. After months of relentless selling, FIIs turned net buyers on November 25, purchasing Indian equities worth ₹4,778 crore, marking their highest monthly inflows. Domestic institutional investors added ₹62.48 billion in buying support, per preliminary NSE data.​

Strategists believe FII selling is likely to taper further as India's valuations have become more attractive post-correction and the structural growth story remains intact. With the global "AI trade" cooling off and India offering one of the strongest emerging-market earnings outlooks, foreign investors are finding it harder to stay underweight on Indian equities.​

Technical and fundamental outlook

From a technical standpoint, a sustained close above 26,277 could trigger fresh momentum toward 26,350–26,500 in the near term, with some analysts eyeing a possible move toward 27,000 over the next few months. On the downside, immediate support is seen around 26,100–26,000, with a stronger safety zone near 25,850.​
Fundamentally, the market's rally is underpinned by expectations of stronger earnings growth in H2 FY26, driven by robust consumption trends observed during the October festive season. Bank Nifty, in particular, is seen as having the strength to support a move to new record highs, supported by rate-sensitive stocks rallying ahead of the RBI's likely rate cut next week.​

Key highlights

Nifty 50 rises 0.30% to hit record high of 26,280, surpassing September 2024 peak of 26,277.​

First all-time high in 14 months after prolonged consolidation phase.​

Sentiment boosted by Fed and RBI rate-cut expectations, improved earnings outlook and FII buying revival.​

FIIs turned net buyers on Nov 25, purchasing ₹4,778 crore worth of equities—highest monthly inflows.​

Technical analysts see further upside potential toward 26,500–27,000 if momentum sustains.​

Sources: Reuters, Moneycontrol, CNBC-TV18, Times of India, Business Standard, The Hindu Business Line, NSE India.​