Sensex up 900 points, Nifty at record high: Decoding the bull run on D-Street

The Sensex surged over 900 points in early trade to cross 70,400, while the Nifty 50 hit a fresh record high. Read on to know the factors that are behind today's bull run on Dalal Street.

It turned out to be a good day at the office for Dalal Street investors as domestic markets surged to new record highs, with the S&P BSE Sensex gaining 900 points to reach over 70,400, and the Nifty50 rising 251 points to cross 21,100.

While both the indices were off the day’s high at around 11:30 am, they were trading close to record high levels, sustaining the momentum seen in early trade.

Decoding the bull run

But what’s behind today’s bull run on Dalal Street? According to analysts, there are multiple factors at play.

The most important one was the US Federal Reserve’s decision to keep key interest rates unchanged and project potential cuts in the coming year influenced positive sentiments across sectors.

It may be noted that the market capitalisation for all BSE-listed companies rose by Rs 3 lakh crore to Rs 354.19 lakh crore. Meanwhile, Nifty IT gained phenomenally by over 3 per cent, led by HCL Tech, Infosys, Mphasis, and Coforge.

Other sectors like Nifty Bank, Financial Services, and Realty also opened more than 1 per cent higher.

Will stock markets rally further?

According to market experts, the dovish message from the Federal Reserve sets the stage for a robust Santa Claus rally and potentially a pre-election rally.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, indicated that that the Fed's announcement signals the end of the tightening cycle, with expectations of rate cuts in 2024.

Deven Mehata, Research Analyst at Choice Broking, said, “The US Fed's remark yesterday indicated that rates will be decreased in 2024. This upbeat speech pushed the US market higher, with the Dow up over 500 points and the S&P 500 up 1.21 per cent.”

“This global positive cue, combined with robust FII purchasing in the Indian market, will drive the Nifty to new highs, and we urge traders and investors to maintain their long positions with a trailing stop loss of 20,850,” he added.

FIIs in focus

Another factor that has supported today’s rally in the domestic stock market is a drop in the US dollar index, leading to increased Foreign Institutional Investment (FII) in India. The US Treasury yield slipped below 4 per cent, and oil prices rose in Asian trade on expectations of lower borrowing costs.

With this, foreign institutional investors remained net buyers, purchasing Indian shares worth Rs 4,710.8 crore on a net basis on Wednesday. In December so far, FIIs have bought shares worth Rs 33,959 crore.

Published By:
Koustav Das
Published On:
Dec 14, 2023