India's stock market kicked off December on a powerful note, with key equity benchmarks scaling unprecedented peaks. This surge was fueled by the release of surprisingly strong economic growth data for the July-September quarter, which significantly boosted investor confidence.
Record-Breaking Rally on Strong Economic Data
On Monday, December 1, the benchmark S&P BSE Sensex climbed 0.35% to reach 86,008.46 points. Simultaneously, the NSE Nifty 50 index advanced 0.31% to settle at 26,284.40 points. Earlier in the trading session, both indices had risen by approximately 0.5% to touch their all-time highs. The trigger for this bullish momentum was data released on Friday, showing that Asia's third-largest economy expanded by 8.2% in the second quarter of the fiscal year. This marks the fastest pace of growth in the last 18 months.
Analysts attributed this impressive economic performance to robust consumer spending and companies front-loading production ahead of major local festivals. Additionally, the anticipation of punitive U.S. tariffs provided a further push. "Strong growth data has buoyed investors' confidence, helping markets hit record highs," commented Simran Jeet Singh Bhatia, Senior Research Analyst of Equity at Almondz Group.
Sectoral Performance and Key Stock Movers
The market rally was broad-based, with 12 out of the 16 major sectoral indices trading in positive territory. The broader market also participated, with the small-cap and mid-cap indices gaining 0.6% and 0.3%, respectively. Several individual stocks witnessed significant movement based on company-specific developments.
Lenskart Solutions saw its shares rise by 2.5% after reporting higher quarterly profit. Brokerage firm Jefferies viewed the results positively, stating they signal the beginning of a compounding growth phase for the eyewear retailer, citing strong store potential and measured global expansion.
Fintech major Paytm continued its upward trajectory, gaining 3% and extending its four-session rally to 10%. This rise follows brokerages like Goldman Sachs and ICICI Securities raising their price targets on the stock. Furthermore, the company received a green light from the banking regulator to operate as an online payment aggregator.
On the losing side, cigarette manufacturers ITC and Godfrey Phillips fell by about 1% each. The decline followed media reports suggesting the government may introduce a bill to levy a new excise duty on tobacco products, replacing the existing GST compensation cess.
RBI Policy Decision in Focus
All eyes are now on the upcoming monetary policy review by the Reserve Bank of India (RBI), scheduled for December 5. The unexpectedly strong GDP growth figures have altered market expectations. Analysts now believe the robust economic performance increases the likelihood of the central bank maintaining a pause on interest rates. Prior to the GDP data release, a Reuters poll had projected a 25-basis-point rate cut.
The current market optimism is built on a combination of factors, including cooling valuations, expectations of a sustained earnings recovery, and supportive fiscal and monetary policies. These elements had already propelled blue-chip stocks to record levels last week, setting the stage for Monday's historic rally.
