 "Why did Sensex zoom 1,850 pts; Nifty top 24,800 on Thursday intra-day?")
Market rally today: The bulls went on a rampage on Dalal Street as the BSE Sensex surged 1,361.41 points or 1.7 per cent in trade on Thursday, December 5, 2024, to log an intraday high of 82,317.74. When compared with the day's low of 80,467 - the BSE Sensex has gained a massive 1,851 points at the day's high today. Mirroring its gains, the NSE Nifty50 also climbed 390.3 points or 1.6 per cent to the day's high at 24,857.75. At close, the BSE Sensex eventually ended 810 points higher at 81,766, and the Nifty was up 241 points or 1 per cent at 24,708.
Assertive global cues, renewed buying by foreign investors, and short-covering on account of the weekly Nifty options expiry fueled the market rally today, according to market experts.
Foreign investors turn net buyers
The rally in the markets, as per Gaurang Shah, Head Investment Strategist, Geojit Financial Services, came due to positive cues from Foreign Institutional Investors (FII). "The lowering of FII selling is boosting positive momentum in the Indian markets," Shah said.
On December 4, 2024, FII net bought Indian equities worth Rs 1,797.6 crore in the Indian markets, while DIIs net sold shares worth Rs 900.62 crore. In the trading session on December 3, FIIs had net bought stocks worth Rs 3,664.67 crore, while DIIs net sold shares to the tune of Rs 250.99 crore.
Positive global cues
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The US stocks finished at fresh milestones on Wednesday with the Dow Jones topping the 45,000 mark for the first time ever even as the Federal Reserve chair sounded cautious on future interest rate cuts. The Nasdaq and the S&P 500 also closed 1.3 per cent and 0.61 per cent higher respectively.
Largely, Asian markets also traded positive with Japan's Nikkei up 0.30 per cent and China's Shangai up 0.12 per cent. However, Hong Kong's Hang Seng fell 0.92 per cent.
RBI policy decision
As per Deepak Jasani, Head of Retail Research at HDFC Securities, the market is speculating that the Reserve Bank of India (RBI) will tweak the cash reserve ratio (CRR). This is also one of the reasons for the rally, according to him.
The RBI is expected to hold rates steady at its policy meeting on Friday due to elevated inflation, but its commentary will likely be pivotal for markets following a sharp growth slowdown in the September quarter.
Jasani also highlighted a technical factor for the rally, where a decisive move above 24,500 was likely to open the next upside of around 24,900 in the near term.