Indian benchmark indices Sensex and Nifty surged to fresh record highs on Friday after Q2 GDP growth surprised on the upside at 7.8% year-on-year, well above the 7.2% consensus estimate.

Banking, IT, and capital goods stocks led the rally, with FII inflows of ₹4,200 crore on a single session — the highest in two months.

What Drove the Rally

Strong rural consumption, a pickup in private capex, and benign inflation under 4% gave traders confidence that the RBI may have more room to cut rates later this quarter.