Monday: Investors Wealth Rises Rs 3 Lakh Cr; Why Sensex Jumped By 877 Pts, Nifty Climbed By 282 Pts On Dec-23?

Stock Market: Indian stocks witnessed a huge rally on Monday, December 23, after an extreme bearish trend last week. In the early trade, the Sensex climbed by at least 877 points and the Nifty 50 surged over 282 points in a single day. The latest bull rally has led to an approximately Rs 3 lakh crore surge in investors' wealth. According to experts, a sustained rally is possible only when there are indications of revival in the economy, which is likely to happen in early 2025.

Sensex, Nifty On December 23:

Sensex skyrocketed by at least 876.53 points or 876.53 points or 1.12% to hit an intraday high of 78,918.12. While Nifty 50 climbed by 282.05 points or 1.2% to hit an intraday high of Rs 23,869.55.

In the early trade, the market capitalisation of BSE-listed companies touched Rs 444.37 lakh crore, which was a rise of Rs 3.38 lakh crore compared to the m-cap of Rs 440.99 lakh crore last week on Friday.

Notably, India's volatility index has dipped by nearly 8%.

Key Factors Driving Market:

Bank Nifty: The banking stocks major index Nifty Bank surged by 438 points or 0.9% to trade at 51,197.60, after hitting an intraday high of 51,417.35. Heavyweights like the Bank of Baroda, IndusInd Bank, SBI, and HDFC Bank drove the rally.

FMCG Stocks: The Nifty FMCG index soared by 645.40 points or 1.2% to trade at 56,246.20, which was near its day's high of 56,304.45. Stocks like ITC, Varun Beverages, Marico, and Tata Consumer led the bullish trend with gains of 1% to 3%.

Metal Stocks: The Nifty Metal index also climbed sharply by 109.30 points or 1.24% to trade at 8,922.55, which was also near its day's high of 8,979.45. Stocks like SAIL, JSPL, JSW Steel, Hindalco, NALCO, Tata Steel, and NMDC surged by 1% to 4%, driving the sentiment.

Realty Stocks: Nifty Realty index also climbed by 1.42%, further lifting the performance. LODHA, Phoenix, Brigade, Godrej Properties, DLF, and SOBHA stocks soared by 1.5% to 4%.

Heavyweights Stocks: Heavyweights like Reliance, Titan, Bajaj twins, Adani Ports, and Tech Mahindra among others also saw massive buying.

Why Market Is Up On Monday?

As per Trading Economics data, the Indian market ended losses from the prior five sessions, mainly boosted by gains in the banking sector, financial services, and metals. The BSE Sensex rebounded from its lowest level in one month in the previous session, tracking a rally on Wall Street on Friday after a benign figure on US inflation restored some hope for further policy easing next year, while the US government shutdown was effectively averted over the weekend.

Also, the data added, traders welcomed the minutes of the Reserve Bank of India's December monetary policy meeting last Friday, which indicated an interest rate cut in February. Easing US Treasury yields also lifted the indexes.

Market Outlook Ahead:

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, "The FII buying witnessed in early December completely reversed last week with FII selling of Rs 15826 crores. The outperformance of the US (S&P 500 up 25% YTD) and the relative underperformance of India (Nifty up 14.64% YTD) are driving this change in FII strategy. The strength of the US economy, robust US corporate earnings, the expectation of corporate tax cut by President Trump soon after assuming office and the steady appreciation in US dollar are factors favourable to the US market."

He added slowdown in Q2 GDP growth and stagnation in corporate earnings in India have soured the domestic market sentiments.

In the short run, Vijayakumar said, there will be market rebounds which may be followed by renewed FII selling. A sustained rally is possible only when we have indications of a growth revival in the economy. This is likely in early 2025.

Last week, during trading sessions of December 16th to 20th, Sensex nosedived by 3,485.81 points or 4.25%. While the Nifty 50 benchmark dropped by 964.80 points or 3.91%.