Dalal Streetwitnessed a massive rally on Thursday, with BSE Sensex surging 930 points to close above the 70,000 mark for the first time.The stock market rally is driven by strong domestic fundamentals and economic data and more recently the US Federal Reserve’s signal of three possible rate cuts in the coming year.
The market capitalisation of all listed companies on the BSE also saw a significant increase of Rs 1.64 lakh crore to reach Rs 356.66 lakh crore during early trade on Friday.
Among the Sensex stocks, Infosys, JSW Steel, Tata Steel, HCL Tech, and Sun Pharma opened with gains, while Axis Bank, Nestle, Bharti Airtel, and Power Grid opened with cuts. Furthermore, Texmaco Rail & Engineering witnessed a jump of over 10% after securing orders worth Rs 1,374 crore. Similarly, Genus Power Infrastructures experienced a 5% upper circuit as it won orders worth Rs 1,026 crore, according to an ET report.
In terms of sectors, Nifty Metal surged 1.6%, while Nifty IT rose 0.9%, led by L&T Technology Services and Infosys. Nifty Bank, Auto, Media, Pharma, Consumer Durables, and Oil & Gas also opened higher.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the market is likely to consolidate after the strong performance in the first half of this month. He believes that positive news flows and a “buy on dips” strategy can help maintain market resilience. Additionally, Vijayakumar highlights the significant inflow of capital to emerging markets like India due to the sharp dip in US bond yield, which further supports the market.
In global markets, Asian shares reached a four-month peak on Friday, benefitting from the rally triggered by the Fed’s actions. However, concerns arise as central banks in Europe push back on rate cuts, potentially impacting the global pivot hopes. The Nikkei in Japan rose 1.2%, set to achieve a weekly gain of 2.5%. Chinese bluechips also rebounded, rising 0.8%, while Hong Kong’s Hang Seng index surged 3.0%. On Wall Street, the Dow Jones, S&P 500, and Nasdaq reached new record highs, with expectations of significant easing by the Fed next year.
Foreign portfolio investors (FPIs) have shown positive sentiment towards the Indian market, purchasing shares worth Rs 39,250 crore in December, following two months of selling streak. This data from the National Securities Depository indicates a renewed interest in Indian stocks.