Stock Market News: Why Sensex was up 1,400 pts today, Nifty crossed 25,400

Stock Market News: Sensex, Nifty hit record highs today. The Nifty index was seeing short covering for Calls in the range of 25,150-25,200 amid the weekly F&O expiry

Sensex, Nifty sudden rally today: Indian stock markets clocked a vertical rally in the last hour of trade on Thursday, September 12, 2024. The BSE Sensex zoomed 1,593 points or 2 per cent to hit a record high of 83,116 intraday. The BSE Sensex crossed the 83,000-mark for the first time today.

The Nifty50, too, soared 415 points to a lifetime high of 25,433, crossing the 25,400 level for the first time ever.

The benchmark indices, however, came off highs slightly by close. The BSE Sensex ended 1,439.55 points or 1.77 per cent higher at 82,962.71. The Nifty50, on the other hand, shut shop at 25,388.90, up 470.45 points or 1.89 per cent. 

 

Hindalco led from the front, rising 4.15 per cent on the Nifty. Bharti Airtel, NTPC, Shriram Finance, Hero MotoCorp, ONGC, Wipro, Adani Ports, M&M, JSW Steel, Grasim, Bajaj Auto, Tech M, Tata Steel, Kotak Bank, Coal India, and Apollo Hospitals were some of the other gainers, advancing between 2 per cent and 3.5 per cent.  

In the broader markets, the Nifty MidCap index added 1.2 per cent and the Nifty SmallCap gained 1 per cent.

"The Indian markets gained in strength and turned sharply higher in the afternoon session as traders preferred to buy large-cap stocks. The markets further gained strength on news of China cutting rates by 50 bps on $5 trillion mortgages as soon as this month to boost consumption came out ahead of a European Central Bank (ECB) policy meeting later in the day, providing much needed sentimental boost to the market,s" said Narendra Solanki, head of fundamental research - investment services at Anand Rathi Shares and Stock Brokers.

Here are the top reasons for the sudden surge in Sensex, Nifty today:

Short covering:

According to analysts, the Nifty index was seeing short covering for Calls in the range of 25,150-25,200 amid the weekly F&O expiry.

Notably, Nifty Options had significant open interest in the 24,500 Put (6.99 million contracts) and 25,000 Call (11.6 million contracts), which was a bearish trend as sellers (Call writers) held strong positions at lower level.

"Active trading was concentrated around the 24,900-24,950 Calls and 24,700-24,800 Puts. The Put-Call Ratio (PCR) had dropped to 0.60 from 0.78, highlighting a cautious market environment. 25,000 was a critical point for any potential trend reversal," highlighted Dhupesh Dhameja, technical analyst at SAMCO.

Rally in metal stocks:

Metal stocks soared in the afternoon trade on Thursday with the Nifty Metal index ending 2.9 per cent higher at 9,291 level. It hit an intraday high of 9,305.

Among individual shares, Nalco, NMDC, Hindalco, Vedanta, and Jindal Steel ended higher in the range of 3.6 per cent to 4.6 per cent. JSW Steel, SAIL, JSW Steel, Hindustan Zinc, Tata Steel, and Hindustan Copper, meanwhile, jumped up to 2.9 per cent.

According to a Bloomberg report, China was looking to cut interest rates on more than $5 trillion of outstanding mortgages as early as this month. The move comes amid the country's attempt to reduce borrowing costs for millions of families to spur consumption.

"Some banks are making final preparations to get ready for the upcoming adjustments on mortgage rates. Some homeowners may enjoy up to 50 basis points of immediate rate reduction," the report added.
 

Easing India-China tensions:

The rally in the market, analysts said, may also be attributed to the statement made by Minister of External Affairs, S Jaishankar, in Geneva that India and China have made "some progress" on border talks. "Seventy five percent of disengagement problems are over," he reportedly said.

Falling India VIX:

India VIX eased nearly over 18 per cent intraday to hit a low of 11.14 level. It ended 3.26 per cent lower at 13.18 level. Analysts said the fear gauge is below 15 which suggests that bullish momentum may gain strength as buyer interest grows.

US futures, Europe stocks rise:

US stock futures were moving higher as investors braced for more inflation and labor data, following a strong end overnight on Wednesday.

Dow Jones Industrial Average futures rose 68 points or 0.18 per cent. S&P 500 futures and Nasdaq 100 futures, also, inched 0.19 per cent and 0.27 per cent higher, respectively.

In the overnight trade, investors came off a choppy session led by tech shares. The S&P 500 ended the day higher by 1.07 per cent, a first for the broader index since October 2022.

At the same time, the 30-stock Dow gained 0.31 per cent after losing as much as 743.89 points earlier in the session. The Nasdaq Composite closed 2.17 per cent higher, making a comeback from a decline of more than 1 per cent.

In Europe, on Thursday, stocks rallied at open as investors in the region await the latest monetary policy decision from the European Central Bank.

The pan-European Stoxx 600 was up 1.07 per cent in opening trade, with all sectors and major bourses trading in the green. Tech and mining stocks jumped 2.5 per cent and 2.05 per cent, respectively.

In Asia, Japan's Nikkei settled 3.4 per cent higher, South Korea's Kospi advanced 1.6 per cent, and Australia's ASX200 added 1.1 per cent.