Indian Stock Market Witnesses Relief Rally: Sensex and Nifty Jump Over 1%

After a week marked by consistent declines, the Indian stock market experienced a much-needed relief rally on Monday, December 23, 2024. The Sensex and Nifty 50, India’s benchmark indices, rebounded with gains of over 1% during the morning session. This sharp uptick provided a sigh of relief to investors and added over ₹3 lakh crore to the market capitalization of BSE-listed firms, reflecting renewed optimism in the market.

Key Market Highlights

1. Sensex Performance
   • Opening Level: 78,488.64 (Previous Close: 78,041.59)
   • Intraday High: 78,918.12 (Up by 877 points, over 1%)
   • Performance at 11:50 AM: Up by 818 points to 78,859
2. Nifty 50 Performance
   • Opening Level: 23,738.20 (Previous Close: 23,587.50)
   • Intraday High: 23,869.55 (Up by nearly 300 points, over 1%)
   • Performance at 11:50 AM: 23,855 (Up by 1.13%)
3. Market Capitalization
   • Overall market cap of BSE-listed firms jumped to ₹444 lakh crore, up from ₹441 lakh crore, making investors wealthier by ₹3 lakh crore in just one session.

What’s Driving the Market Rally?

1. Value Buying

• After a significant 5% correction in the last five sessions, large-cap stocks are attracting investors looking for undervalued opportunities.
• These stocks, backed by strong fundamentals like consistent earnings and robust growth potential, are seen as lucrative options for medium- to long-term investments.

2. Positive Global Cues

• Wall Street Rally: Gains in US markets, driven by softer inflation numbers, uplifted sentiment globally.
  • Underlying Inflation: The smallest increase in six months has eased fears of aggressive Federal Reserve rate hikes.
• Avoidance of US Government Shutdown: Congress passed spending legislation averting a government shutdown, further boosting global investor confidence.
• Asian Market Influence: Major Asian indices also recorded gains, reflecting optimism from global cues.

3. Gains in Heavyweight Stocks

• Key contributors to the rally include ITC, HDFC Bank, and Reliance Industries, which rose between 1-2%.
• The Nifty Bank Index jumped over 1%, with all its components posting gains, bolstering the overall recovery in frontline indices.

Sectoral Performance

• Banking Stocks:
  Banking stocks emerged as key drivers of the rally due to their significant weight in the Sensex and Nifty. The Nifty Bank Index saw a broad-based recovery, pushing the benchmark indices higher.
• IT and FMCG Sectors:
  Leading IT and FMCG stocks contributed to the positive momentum, with gains across the board.

The Indian stock market’s relief rally on December 23 comes as a refreshing break after a series of losses last week. Factors like value buying, positive global cues, and gains in heavyweight stocks have driven the recovery. While this upward movement has restored investor confidence in the short term, market watchers advise staying vigilant about global economic developments and domestic earnings reports to determine long-term trends.

As investors continue to focus on undervalued opportunities and positive macroeconomic cues, this rally could mark the beginning of a stabilization phase for the Indian stock market.

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FAQs

1. Why did the Indian stock market rise on December 23, 2024?
The market rebounded due to value buying in large-cap stocks, positive global cues like softer US inflation data, and gains in heavyweight stocks.

2. How much did the Sensex and Nifty rise today?
The Sensex jumped 877 points (1%) to an intraday high of 78,918.12, while the Nifty gained nearly 300 points (1.13%) to 23,869.55.

3. What was the increase in market capitalization?
The overall market capitalization of BSE-listed firms rose by ₹3 lakh crore, reaching ₹444 lakh crore.

4. Which sectors contributed the most to the rally?
The banking, IT, and FMCG sectors were major contributors, with the Nifty Bank Index showing notable gains.

5. Should investors buy now?
Experts suggest exploring undervalued stocks with strong fundamentals for medium- to long-term investments while staying cautious of global and domestic developments.