On Tuesday, the benchmark Indian stock indices experienced a significant rally, with gains of approximately 1.5%, driven by positive developments both globally and domestically. The market was buoyed by disappointing U.S. retail sales data, which sparked hopes that the Federal Reserve might consider interest rate cuts. Additionally, India’s trade deficit hit a three-year low, further enhancing investor sentiment.
Sensex and Nifty Surge to New Heights
The Sensex soared by 1,131.31 points, or 1.53%, closing at 75,301.26, which marked its most substantial increase since February 4. Meanwhile, the Nifty index climbed 325.55 points, or 1.45%, surpassing the 22,800 threshold.
- Key Market Highlights:
- Sensex reached 75,301.26.
- Nifty closed at 22,834.30.
- Strong sector performance across real estate, automotive, and banking.
Ajit Mishra, Senior Vice President of Research at Religare Broking, noted, "The market decisively broke out of a week-long consolidation, displaying robust upward momentum. The Nifty showed strong performance throughout the day, driven by broad participation across key sectors."
Global Markets Influence Local Sentiment
Following the upward trends seen in the Dow Jones and S&P 500, which rose by 0.85% and 0.64% respectively, European indices also reflected strength, gaining up to 1.20% on Tuesday. Other Asian markets, including those in Japan, Hong Kong, and Taiwan, also experienced positive momentum.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities, highlighted, "The buoyancy in global equities instilled confidence among local investors, leading to value buying across various sectors. After a bearish phase, attractive valuations prompted investors to focus on underperforming sectors."
Broader Market Performance and Investor Sentiment
The broader market outperformed the benchmark indices, with significant gains over 2%. The BSE Midcap index rose by 2.10%, while the BSE Smallcap index ended a five-day losing streak with a 2.73% increase. The India VIX, a measure of market volatility, decreased by 1.52%, settling at 13.21.
- Market Dynamics:
- Positive market breadth: 2,815 gainers vs. 1,221 losers.
- A surge in investor wealth by ₹7.03 lakh crore, bringing the total market capitalization on the BSE to ₹399.86 lakh crore.
Sectoral Gains and Key Contributors
Every sector on both the BSE and NSE closed positively, with real estate, industrials, and consumer discretionary stocks leading the charge, each gaining up to 3%.
The rally was significantly supported by ICICI Bank and HDFC Bank, which contributed a combined 402 points (or 36%) to the Sensex rise. Other notable performers included Zomato, M&M, Tata Motors, and L&T, with gains reaching up to 7.11%.
Interestingly, foreign portfolio investors (FPIs) returned as net buyers after a hiatus of 11 sessions, purchasing ₹1,462.96 crore worth of equities, according to NSE data. Domestic institutional investors (DIIs) also made substantial purchases, acquiring ₹2,028.15 crore in equities.
This robust market activity indicates a renewed investor confidence, setting the stage for potential continued growth in the coming sessions.
