News

Market Surge: Sensex Rallies 1,400 Points on Robust Auto Sales, IT Gains, and Positive Economic Outlook

February 9, 2025
Smart Money

Stock Market Surge: Sensex Rallies 1,400 Points Ahead of Earnings Season

In a notable turn of events, the benchmark BSE Sensex experienced a significant rally on Thursday, surging 1,436 points or 1.83% to settle at an impressive 79,943. The broader NSE Nifty50 also made strides, closing 446 points or 1.88% higher at 24,188. This upward momentum comes as investors approach the eagerly anticipated quarterly earnings season, set to begin next week.

Market Highlights

During the trading session, the Sensex saw an intraday leap exceeding 1,500 points, while Nifty50 recovered more than 450 points, briefly crossing the 24,200 mark. The increased activity in the market contributed to a substantial rise in the overall market capitalization of listed companies on the BSE, which surged by Rs 5.89 lakh crore, bringing the total to a staggering Rs 450.32 lakh crore.

All major sectoral indices closed in the green, with Nifty’s Auto, Financial Services, IT, and Consumer Durables sectors leading the charge, reflecting gains between 1.5% and 3.8%.

Key Drivers of the Rally

Several key factors contributed to this market rally:

  1. Strong December Auto Sales: The automotive sector saw an unexpected boom in sales, with companies posting robust figures that defied the typical seasonal slowdown usually observed in December. Eicher Motors was a standout performer, rising 8.5% after reporting a 25% year-on-year increase in Royal Enfield sales, amounting to 79,466 units sold in December, compared to 63,887 units last year. Maruti Suzuki also observed a remarkable 30% year-on-year growth, delivering 1,78,248 units. Other automotive giants, including Mahindra & Mahindra and Ashok Leyland, also reported significant gains of 4% and 6.2% respectively.
  2. Rise in IT Stocks: The IT sector, which ranks second after financials, climbed 2.3%, buoyed by favorable growth projections from firms like CLSA and Citi for the December quarter and beyond. Major players such as Infosys, TCS, HCL Tech, and Tech Mahindra collectively contributed over 360 points to the Sensex’s rally, underlining the sector’s notable resurgence.
  3. Optimism for the Indian Economy: According to Bernstein’s India strategy for 2025, the economy appears to have bottomed out, with potential growth expected to materialize within the next one to two quarters. They identified a current phase of recovery based on September’s 5% growth rates and a low level of industrial growth. Bernstein recommends strategic investments ahead of this anticipated recovery, revising its target for the Nifty 50 to 26,500, indicating a potential 12% return by year-end.
  4. Recovery in Banking and Financial Stocks: The banking and financial sectors exhibited a robust recovery, significantly contributing to the overall market gains. The stock prices of Bajaj Finserv and Bajaj Finance surged nearly 8% and 6.5% respectively, with other private lenders, including HDFC Bank, Kotak Mahindra Bank, and IndusInd Bank, also adding to the positive momentum.
  5. Expiry Day Buying: Traders engaged in strategic buying on Thursday, coinciding with the weekly expiry. Over the previous two weeks, the Nifty had been trading within a defined range, maintaining a tight consolidation between 23,500 and 23,900. The decisive breakout beyond this range on Thursday added further impetus to the indices.

Conclusion

As the market braces for the upcoming earning season, these developments signal a potentially optimistic trajectory for investors. The notable performance of various sectors alongside strengthening economic indicators offers a promising outlook, further energizing market participants. With these trends in play, stakeholders are keenly watching how this rally develops in the coming weeks.