Massive Rally on Dalal Street: Sensex Jumps Over 1,000 Points
Indian equity markets witnessed a powerful upswing on Wednesday, with the benchmark Sensex catapulting by a staggering 1,022 points to close at 85,610 points. This impressive surge, the most significant single-day gain in approximately six and a half months, was fueled by a combination of positive global cues and optimistic domestic expectations.
Key Drivers Behind the Market Optimism
According to market experts, a perfect storm of positive factors converged to lift investor sentiment. A strong closing in the US markets on Tuesday night set a positive tone. This was complemented by a 1% decline in crude oil prices, which helped ease inflationary worries. Furthermore, growing anticipation of an interest rate cut by the US Federal Reserve in December, alongside softer US yields and a weaker dollar, improved the global investment climate.
Vinod Nair of Geojit Investments pointed to a 'Santa Claus rally' in global markets as a key influence. On the domestic front, he noted that the uptrend was fuelled by robust retail and domestic institutional investor inflows. The Reserve Bank of India (RBI) is also widely expected to mirror the global trend with a 25 basis points rate cut in December, supported by moderating inflation and a dovish policy stance. Market players also highlighted that talks of a truce between Russia and Ukraine contributed to the positive global sentiment.
Wealth Creation and Market Proximity to Peaks
The spectacular rally resulted in a massive wealth creation for investors. The market capitalisation on the BSE skyrocketed by Rs 5.5 lakh crore in a single session, reaching a total of Rs 474.9 lakh crore. The index is now tantalizingly close to its all-time high, sitting less than half a percentage point away from the peak of 85,978 points recorded 14 months ago.
The broader Nifty index also joined the party, climbing 321 points to settle at 26,205 points. This places it a mere 72 points shy of its own record high of 26,277 points, which was hit in September 2024. In a show of broad-based strength, 28 out of the 30 Sensex constituents ended the trading day in the green, with only Bharti Airtel and Asian Paints bucking the positive trend.
