The markets witnessed a strong rally on Friday, with the benchmark BSE Sensex surging 1,961.32 points or 2.54 per cent to close at 79,117.11, while the NSE Nifty 50 advanced 557.35 points or 2.39 per cent to end at 23,907.25.

The market rally was broad-based, with major gains seen across sectors. State Bank of India emerged as the top gainer on the NSE, rising 4.33 per cent, followed by Bajaj Finance at 3.93 per cent, Titan at 3.89 per cent, ITC at 3.69 per cent, and TCS at 3.66 per cent. Bajaj Auto was the sole loser among Nifty constituents, declining 0.39 per cent.

The broader market indices also participated in the rally, with the Nifty Next 50 gaining 1.87 per cent to close at 68,016.85. The Nifty Midcap Select rose 1.17 per cent to 12,306.85, while the banking sector indices showed strength with Nifty Bank and Nifty Financial Services both advancing 1.51 per cent to close at 51,135.40 and 23,623.75, respectively.

The market breadth remained positive, with 2,446 stocks advancing against 1,475 declines on the BSE. A total of 4,041 stocks were traded, with 120 remaining unchanged. The session saw 163 stocks hitting 52-week highs, while 107 touched 52-week lows. Additionally, 307 stocks hit the upper circuit, and 287 hit the lower circuit.

Vinod Nair, Head of Research at Geojit Financial Services, attributed the rally to attractive valuations in large-cap stocks and expectations of improved corporate earnings. “The market witnessed a significant broad-based rally, from the oversold territory, predominantly led by large-cap stocks, as their valuations appeared appealing, with expectations of improvement in corporate earnings in the second half of the fiscal year,” he said.

The market sentiment was also boosted by positive global cues, including Japan’s moderating inflation and a 39 trillion yen stimulus package announcement. Domestic factors, including anticipated state election results, contributed to the positive momentum.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted that exit polls suggesting BJP victories in two states helped boost investor confidence. “The exit polls hinting at BJP winning in both the states seemed to have boosted investors’ sentiment in a big way and shrugged off the Adani controversy,” he said.

Technical analysts remain optimistic about the market’s trajectory. Tejas Shah from JM Financial & BlinkX highlighted that the Nifty’s support at 23,500 remains crucial for maintaining the bullish momentum. The index faces an immediate psychological resistance at 24,000, with the next resistance zone at 24,200-24,250 levels.

Looking ahead, market participants are focusing on several key events, including state election results due on Saturday and the upcoming RBI monetary policy meeting in December. The release of India’s Q2FY25 GDP data on November 29 is also expected to influence market sentiment.

The day’s rally helped the market recover from recent losses, with the Nifty gaining 375 points over the week. The India VIX, which measures market volatility, rose 8.93 per cent to 16.10, indicating increased market activity and investor participation.

Published on November 22, 2024