Sensex soars 1,500 pts; Nifty tops 24,150; What's boosting stock market?

Sensex zoomed 1,525.46 points or 1.94 per cent and logged an intraday high at 80,032.87, while Nifty advanced 483 points or 2.03 per cent to the day's high at 24,226.7. Here's why

The Indian market surged in trade on Thursday, January 2, 2025. At close, Sensex zoomed 1,525.46 points or 1.94 per cent and logged an intraday high at 80,032.87, while Nifty advanced 483 points or 2.03 per cent to the day's high at 24,226.7.

 

On BSE, Bajaj Finserv, Bajaj Finance, Maruti Suzuki, Mahindra & Mahindra (M&M) and Infosys were among the top gainers. While, only Sun Pharma, Adani Ports, NTPC and SBI were among the top laggards.

Here are a few reasons why Sensex and Nifty gained in trade today:

Bargain buying

Indian markets have experienced a sharp correction recently which has led to cheaper good quality stocks. NSE Nifty fell over 8.5 per cent and Sensex fell nearly 7.36 per cent from its from its record peak.

 

 

"Severe correction in the Indian stocks is boosting bargain buying in certain stocks with good quality and cheaper price," said G Chokkalingam Founder, Equinomics Research Pvt Ltd.

 

Budget 2025

Gaurang Shah, Head Investment Strategist, Geojit Financial Services attributes the rally in the market to positive sentiments surrounding the forthcoming budget.  As per Shah, this year's Union budget 2025 will be growth-oriented.  Anchal Kansal- Senior Research Analyst- Green Portfolio PMS reckons if the government comes out with a robust tax framework and better execution of agreements in public and private sector, markets might open and close on an exhilarating note.  Kansal added government's focus in Budget 2025 would remain on public infrastructure. Highways, roads, and railways will be key focus areas. Also, after the power shift in the US, sectors like information technology (IT) and pharma might see a boost backed by strengthened dollar revenues. 

 

Auto stock rally

Nifty Auto gained over 2 per cent in trade at 23,615.70 after the domestic passenger vehicle (PV) wholesales in the Indian automobile industry rose by 11 per cent year-on-year (Y-o-Y) in December to 320,000 units. The surge was driven by strong demand for SUVs (sports utility vehicles), a robust recovery in the urban market, year-end discounts, and solid sales of CNG-powered cars.

 

On the auto index, 12 stocks advanced and 3 declined. Among others, Eicher Motor shares were up over 6 per cent, Maruti Suzuki and Ashok Leyland were up over 4 per cent, M&M was up over 3 per cent and TVS Motor Company was up nearly 3 per cent.

 

Technical view  "Nifty formed a bullish Bat pattern coupled with bullish divergence, triggering a strong upward movement of 600 points from the bottom of 23,460. This technical setup signals potential further bullish momentum. Looking ahead, 23,800 acts as a significant support level, which will be crucial in maintaining the upward trend. On the upside, 24,200 serves as a key resistance level. A decisive close above 24200 could pave the way for further gains, potentially pushing Nifty towards 24,500 in the near term. Market participants should watch these levels closely for confirmation of continuation or reversal," said Jigar S Patel, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers. 

"Having achieved 23,770, a consolidation is expected. A collapse is less likely, while a direct rise above 23,850 could trigger a 24,025 move, but not much beyond. We are yet to see evidence of momentum, keeping volatility the dominant theme," said Anand James, Chief Market Strategist, Geojit Financial Services.