Stock Market Rising Today: Domestic benchmark indices surged on Friday, with the BSE Sensex climbing 2,000 points and the Nifty reclaiming the 23,900 mark, recovering from the five-month lows hit in the previous session.
This rally was fueled by strong US labor market data.
Following the surge, the total market capitalization of all listed stocks on the BSE rose by Rs 6.9 lakh crore to Rs 432.25 lakh crore.
Key contributors to the Sensex rally included ICICI Bank, Reliance Industries, SBI, Infosys, ITC, and L&T. Other stocks like ITC, TCS, Bharti Airtel, and Bajaj Finance also supported the upward momentum.
Buying activity was broad-based, with all major sectors posting gains. The Nifty PSU Bank and Realty indices rose nearly 3 per cent, while Nifty Bank, Financial Services, FMCG, IT, Metal, Healthcare, and Oil & Gas sectors saw gains of 1-2 per cent.
Rally in IT Stocks
The Nifty IT index jumped nearly 2 per cent following positive US labor market data. Initial jobless claims in the US fell by 6,000 to a seasonally adjusted 213,000 for the week ending November 16, the lowest in seven months. This suggests that US job growth likely rebounded in November after a slowdown caused by hurricanes and strikes in October.
A stronger US labor market is a positive for Indian IT companies, which derive a significant portion of their revenue from the region.
Investor attention is now focused on statements from Federal Reserve officials ahead of the mid-December FOMC meeting. According to CME Group’s Fed, there is a 25-basis-point interest rate cut expected by the Fed in December.
Adani Stocks Lift Sentiment
According to Deepak Jasani, Sr. VP and Head of Retail Research at HDFC Securities, the recovery in the market was partly driven by gains in Adani Group stocks after Thursday’s sharp decline. Adani stocks had dropped significantly following news of Gautam Adani’s indictment in New York for alleged involvement in a multibillion-dollar bribery and fraud scheme.
By 1:40 PM, Adani Enterprises shares were up over 3 per cent, Adani Green Energy rose by more than 0.5 per cent, Adani Ports gained over 3 per cent, Ambuja Cements was up over 4 per cent, and Adani Power increased by around 0.5 per cent.
Heavyweights Lead the Rally
BSE Sensex heavyweights ICICI Bank, Reliance Industries, SBI, and Infosys were the key drivers of the market rally, contributing nearly 40 per cent of the gains on the benchmark index.
Among the top movers, SBI surged nearly 5 per cent to Rs 818, while JSW Steel, UltraTech Cement, Bajaj Finance, Adani Ports, Titan, ITC, Larsen & Toubro, HCL Technologies, TCS, and Bharti Airtel all gained more than 2 per cent.
The rally also comes as investors capitalize on recent declines, with the Nifty index down over 11 per cent from its recent peak. The mid-cap and small-cap indices have also corrected by around 12 per cent and 9 per cent, respectively. As market sentiment shifts, investors are seizing the opportunity presented by lower valuations, showing confidence in the long-term recovery potential of these segments.
Technical Bounce
Gaurang Shah, Head Investment Strategist at Geojit, noted that the market is attempting to find its bottom, with the Nifty looking for support near the 23,300-23,000 levels. He mentioned that value buying is visible, but there is no indication of a major correction.
Positive Global Cues
Global markets also boosted sentiment, with US markets closing higher on Thursday. The Dow Jones rose 1.06 per cent, the S&P 500 gained 0.53 per cent, and the Nasdaq Composite was flat with a positive bias.
Asian markets were mostly positive, with Japan’s Nikkei up 0.68 per cent. However, Chinese indices like the CSI 300 and Shanghai Composite dropped over 3 per cent, and Hong Kong’s Hang Seng fell 2.14 per cent. The UK’s FTSE 100 also rose 0.79 per cent.
Jasani further believes the negative impact of the Russia-Ukraine war has subsided, citing Ukraine’s first strike with US-made missiles against Russia. The market now expects that the situation will not worsen from here.