Closing Bell: Market Snaps 5-Day Losing Streak, Sensex & Nifty Gain Amid Strong Global Cues; Metals Lead

After enduring a bruising five-session losing streak, the Indian equity market staged a strong recovery on Monday, December 23, driven by value buying and positive global cues. Benchmark indices surged over 1% in intraday trading, with the Sensex closing 499 points higher at 78,540 and the Nifty gaining 166 points to end at 23,753. However, markets ended off their intraday highs, with the Nifty remaining below its crucial 200-day moving average (DMA).

While largecap indices rebounded sharply, the broader markets delivered a mixed performance. The BSE Midcap index rose modestly by 0.10%, while the BSE Smallcap index slipped 0.60%, underperforming the benchmarks. Despite this, the overall market capitalization of BSE-listed firms climbed to Rs 442 lakh crore, adding Rs 1 lakh crore in investor wealth in a single session.

The recovery was broad-based, with several sectoral indices closing in the green. Nifty Bank, PSU Bank, and Realty indices gained over 1%. Financial Services, FMCG, Consumer Durables, Metal, and Oil & Gas indices also logged nearly 1% gains each.

However, IT and Auto stocks bucked the trend, witnessing profit-booking. Major losers included Hero MotoCorp, Maruti Suzuki, HCLTech, and TCS, which weighed on the respective sectoral indices.

Factors Driving the Market Rally

Buying After Correction

Investors seized the opportunity to buy largecap stocks at lower valuations following a sharp correction last week. Experts highlighted that fundamentally strong stocks with solid growth prospects, low debt, and consistent cash flows attracted strong buying interest.

Global Cues Support

Indian markets mirrored gains in Wall Street and major Asian markets, which rallied on softer US inflation data. According to a Reuters report, the US Commerce Department reported that inflation recorded its smallest increase in six months, easing concerns over aggressive interest rate hikes. Additionally, investor sentiment improved after the US Congress passed legislation to avert a government shutdown.

Heavyweight Stocks Lead

Blue-chip stocks played a pivotal role in lifting indices. Reliance Industries, ITC, and HDFC Bank rallied between 1% and 2%, contributing to the Sensex and Nifty's gains. The Nifty Bank index, a heavyweight in frontline indices, surged over 1% to close at 51,318, with all constituent stocks, except Kotak Mahindra Bank, ending in the green.

Hopes of Policy Support

Investors appeared optimistic about upcoming domestic triggers, including the Reserve Bank of India's monetary policy and the Union Budget 2025. With markets already digesting the US Federal Reserve's revised interest rate outlook, the focus shifted to domestic policy measures that could boost economic growth.

Sectoral Tailwinds

Adani Wilmar snapped a six-day losing streak, surging over 8%. India Cements rallied 8% following the Competition Commission of India's (CCI) approval for UltraTech Cement's Rs 7,000-crore deal. Sterling and Wilson gained over 5% on winning an order worth Rs 1,200 crore. JBM Auto rose 2% after bagging an Rs 1,800-crore order for 343 electric buses.

On the downside, HCC dropped 6% amid selling pressure, and Siemens remained under pressure due to a weak outlook.

Despite the recovery in benchmarks, market breadth was evenly poised, reflecting mixed sentiment across broader indices. The advance-decline ratio stood at 1:1.