In a remarkable display of bullish sentiment, Indian stock markets surged to unprecedented heights on Thursday, with both the BSE Sensex and NSE Nifty 50 closing at record levels. The rally was primarily fueled by optimism surrounding potential interest rate cuts by the US Federal Reserve and strong buying interest across sectors.
The BSE Sensex skyrocketed 1,439.55 points or 1.77 per cent to close at 82,962.71, while the Nifty 50 soared 470.45 points or 1.89 per cent to end at 25,388.90. The robust performance was broad-based, with 2,295 stocks advancing compared to 1,657 declines on the BSE. Notably, 278 stocks hit their 52-week highs, while only 36 touched their 52-week lows.
Among the top gainers on the Nifty 50, Hindalco led the pack with a 4.15 per cent increase, followed by Bharti Airtel (3.56 per cent), NTPC (3.36 per cent), Shriram Finance (3.36 per cent), and Grasim (2.94 per cent) cent). Nestle was the lone loser, marginally down by 0.11 per cent.
Notable performers
In the Sensex pack, Bharti Airtel emerged as the top gainer, surging 4.36 per cent to close at 1,646.50. Other notable performers included NTPC (3.87 per cent), M&M (3.36 per cent), JSW Steel (3.06 per cent) and Adani Ports (2.94 per cent). Remarkably, there were no losers among the Sensex constituents.
Ajit Mishra, SVP of Research at Religare Broking, commented on the day’s performance, stating, “The markets reached a new high on the weekly expiry day, gaining nearly 2 per cent. While the session remained subdued for the most part, strong buying in heavyweight stocks across sectors propelled the index sharply upward in the final hours… This surge has reversed the previous weakness, positioning Nifty to potentially test the 25,550+ zone.”
The rally was further bolstered by foreign institutional investors (FIIs) turning net buyers in the cash market over the past three days. Ameya Ranadive, Certified Market Technician at StoxBox, noted, “Indian market ended on a robust move on Thursday as investors reduced bets on larger rate cuts by the Federal Reserve at its upcoming policy meeting next week. A rate cut in the US could boost growth, trigger foreign inflows and spur a rise in discretionary spending, helping domestic equities, in general, and information technology, pharmaceutical companies in particular.”
Metal, auto lead gains
Sector-wise, metals, auto, and energy led the gains, with all indices concluding in positive territory. The broader indices also participated in the rally, with the midcap index hitting a new high.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, highlighted the positive sentiment, saying, “Across the board buying support lifted both benchmark Sensex & Nifty to fresh record highs as falling US bond yields and expectations of a rate cut by the US. Federal Reserve in next week’s policy meeting fueled massive optimism…With retail money continuing to flow in despite concerns of stretched valuations in local markets, investors remain upbeat about India’s resilient economy in a slowing global economy.”
The market’s strong performance was accompanied by a decrease in volatility, with the India VIX cooling off by 3.26 per cent to settle at 13.18, indicating reduced market anxiety.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C Mehta Investment Intermediates, provided technical insights, stating, “Technically, the index formed a large green candle on the daily chart, indicating strength. Moreover, the index has witnessed a breakout from the short-term consolidation zone of 24,750-25,330. As per this breakout, if the index holds above 25,300, it could potentially test 25,600-25,800 in the short term. Hence, a ‘buy on dips’ strategy is recommended as long as Nifty remains above 25,300.”
Shrikant Chouhan, Head of Equity Research at Kotak Securities, added, “After a stellar rally, the Nifty ends 470 points higher while the Sensex was up by 1,440 points. Among sectors, all the major sectoral indices were traded in to the positive territory but Metal and Infra and Auto indices gained over 2 percent… For the day traders now, 25,300/82,700 and 25,200/82,500 would act as a key support zones while 25,500-25,600/83,300-83,600 would be the key resistance areas for the bulls.”
Interesting insights
The options market also provided interesting insights. Dhupesh Dhameja, Technical Analyst at SAMCO Securities, noted, “Bearish sentiment has strengthened, with call writing intensifying over put writing for the eighth consecutive day, exerting downward pressure. Significant open interest is seen at the 24,500 Put (53.58 lakh contracts) and 25,000 Call (30.64 lakh contracts), suggesting a bearish outlook as put writers adjust to lower levels.”
As the markets closed at their highest levels ever, investors and analysts alike remain cautiously optimistic about the future trajectory, keeping a close eye on global cues and domestic economic indicators. The upcoming US Federal Reserve meeting next week is expected to be a crucial event that could potentially influence market sentiment and direction in the near term.
Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) were net buyers in the capital market segment, purchasing ₹23,301.02 crore worth of equities while selling ₹15,606.02 crore, resulting in a net inflow of ₹7,695 crore. In contrast, Domestic Institutional Investors (DIIs) were net sellers, buying ₹13,690.60 crore and selling ₹15,491.14 crore, leading to a net outflow of ₹1,800.54 crore. Among other categories, Non-Resident Indians (NRIs) recorded a net outflow of ₹5.59 crore, while proprietary traders were net buyers with a net inflow of ₹524.72 crore.