Stock Market Rally: Discover The Key Factors Fueling Sensex And Nifty Today

Stock Market Rally: Both the indices hit new record highs during the session, with the BSE Sensex touching 79,396 and the Nifty50 reaching 24,087

Stock Market Rally: Indian benchmark indices rallied for the third consecutive session, with the Nifty crossing the 24,000 mark for the first time ever, driven by gains in Information Technology and energy sectors. At the close of trading on Thursday, the Sensex rose by 569 points, or 0.72 per cent, to settle at 79,243, while the Nifty climbed 176 points, or 0.74 per cent, to finish at 24,045.

Both the indices hit new record highs during the session, with the BSE Sensex touching 79,396.03 and the Nifty50 reaching 24,087.45. The Nifty Bank index also achieved a fresh record high of 53,180.75.

Though the benchmark indices exhibited bullish momentum, the market breadth was negative, with 1,128 shares advancing, 2,240 shares declining, and 93 shares remaining unchanged.

After a tepid start in the morning, the market erased opening losses and extended gains as the day progressed, hitting fresh milestones. Analysts in the following have emphasised the prime reasons behind the spike.

Key Drivers Behind the Rally

Balaji Viswanathan, Managing Director and CEO of Expleo India, while commenting on the market's remarkable performance, has attributed several key factors.

Global Cues: Positive global cues and strong international market performances have boosted investor sentiment, contributing to a bullish trend in Indian equities.

Corporate Earnings: Robust earnings reports from major companies across various sectors have instilled confidence among investors, prompting increased buying activity.

Economic Indicators: Favourable economic indicators and expectations of sustained growth in sectors like IT, pharmaceuticals, and financial services have driven the markets upwards.

Government Policies: The government's commitment to economic reforms and strategic stimulus measures to bolster post-pandemic recovery have boosted market optimism."

Cautious Optimism

Abhishek Khudania, Senior Executive Director – Wealth at Client Associates, highlighted the natural phenomenon of markets reaching all-time highs.

"All-time highs are a natural phenomenon of equity assets, seen numerous times in the Sensex journey over the last 45 years. The current rally is driven by a combination of fundamentals, liquidity, and sentiments.

Domestic Liquidity: All-time high monthly SIPs in mutual funds, primary market euphoria in the mainboard and SME segments, and a record number of Demat accounts opened indicate strong domestic liquidity.

Foreign Investments: Foreign Institutional Investors (FIIs) have returned to the market after being net sellers over the past two months, injecting close to Rs 30,000 crore since June 7, 2024.

Khudania advised caution despite the market highs, noting, "While such occasions make great headlines, one should tread with caution as volatility is the name of the game."