Stock Market Rally: Sensex Surges by 1,400 Points, Nifty50 Closes Above 24,150
Date: Thursday, [Insert Date Here]
The Indian stock market witnessed a significant rally on Thursday, with the benchmark BSE Sensex soaring by 1,436 points, or 1.83%, to close at 79,943. The NSE Nifty50 also marked a notable ascent, climbing 446 points, or 1.88%, to settle at 24,188. This remarkable uptick comes just ahead of the forthcoming quarterly earnings season, set to commence next week.
Market Overview
During the trading session, the Sensex even surged over 1,500 points at its peak, while the Nifty50 reclaimed the 24,200 mark during the day’s high. The overall market capitalization of all listed companies on the BSE increased by Rs 5.89 lakh crore, bringing the total to Rs 450.32 lakh crore. Impressively, all major sectoral indices concluded in the green, with sectors such as Nifty Auto, Financial Services, IT, and Consumer Durables witnessing gains ranging from 1.5% to 3.8%.
Key Drivers of the Rally
Several factors contributed to this robust market performance:
-
Strong December Auto Sales
Auto stocks took center stage thanks to unexpectedly strong December sales data. Eicher Motors led the charge, surging by 8.5% following a reported 25% year-on-year increase in Royal Enfield sales, equating to 79,466 units sold compared to 63,887 units the previous December. Similarly, Maruti Suzuki recorded a significant 30% year-on-year sales increase, delivering 1,78,248 units compared to 1,37,551 units last year, resulting in a 5.6% rise in its shares. Other companies, including Mahindra & Mahindra and Ashok Leyland, also experienced gains of 4% and 6.2%, respectively, bolstered by favorable sales figures. -
Rise in IT Stocks
The IT sector, which ranks as the second-largest sector after financials, recorded a growth of 2.3% as institutional reports predict continued revenue growth for the sector through the December quarter and into 2025. Major IT firms such as Infosys, TCS, HCL Tech, and Tech Mahindra collectively contributed over 360 points to the Sensex’s rally. -
Positive Economic Outlook
A report from Bernstein suggests that the Indian economy has reached its nadir, with growth projected to improve within the next one to two quarters. The report indicates that with September’s growth rate at 5% and prevailing uncertainties dissipating, now is an opportune time to invest ahead of a recovery phase. Bernstein revised its target price-to-earnings (PE) ratio to 19.5x for a two-year forward earnings-per-share (EPS), forecasting a year-end Nifty 50 target of 26,500—a potential return of 12% over the year. -
Recovery in Banking and Financial Stocks
Financial stocks experienced a robust rebound, led by heavyweights Bajaj Finserv and Bajaj Finance, which gained nearly 8% and 6.5%, respectively. Other major private sector banks, such as HDFC Bank, Kotak Mahindra Bank, and IndusInd Bank, also contributed significantly to the overall market gains. -
Expiry Day Buying Pressure
The Nifty had been trading within a defined range of 23,900 on the upside and 23,500 on the downside, forming a series of small-bodied candles during this consolidation. Thursday’s decisive breakout above this upper band was characterized by aggressive buying, coinciding with the weekly expiry of options.
Conclusion
As investors gear up for the upcoming quarterly earnings season, the impressive rally seen on Thursday indicates growing optimism in the market, primarily driven by strong sector performances and positive economic predictions. The sustained momentum of the stock market sets an encouraging backdrop as companies prepare to unveil their financial results in the coming weeks.
Share this article:
