Sensex leaps 1,500 points on consumption boost, 6 factors pushing latest surge

The Indian benchmark indices started the New Year 2025 on a positive note and extended their upward trend on Thursday with BSE Sensex surging past 1,500 points and Nifty 50 surpassing 24,000-mark.

On Thursday, January 2, 2025, BSE Sensex ended day’s trade at 79,943.71, up 1,436.30 points or 1.83 per cent, while Nifty 50 zoomed 445.75 points or 1.88 per cent to close at 24,188.65.

Sensex’s intra-day high on Thursday was 80,032.87, up 1,525.46 points or 1.94 per cent from the previous close. Meanwhile, Nifty advanced 483 points or 2.03 per cent to the day’s high at 24,226.70.

Also, BSE Midcap and Smallcap indices added a per cent each.

The Indian stock market got a fillip from favourable buying in banking and IT stocks coupled with optimism around quarterly earnings and a positive technical setup.

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The top gainers on BSE included Bajaj Finserv, Bajaj Finance, Maruti Suzuki, Mahindra & Mahindra (M&M) and Infosys, while among the laggards were Sun Pharma, NTPC and SBI.

Meanwhile, biggest gainers in Nifty included Bajaj Finserv, Eicher Motors, Bajaj Finance, Maruti Suzuki, Shriram Finance, while losers were Britannia Industries, Sun Pharma.

Atleast 170 stocks touched their 52-week high on the BSE, including Eicher Motors, Lloyds Metals, M&M, PB Fintech, BLS International, Ipca Labs, Firstsource Solutions, Jubilant FoodWorks, United Spirits, Kalyan Jewellers, Anant Raj, Muthoot Finance, Coromandel International, Lupin, Welspun Corp, Laurus Labs, Lemon Tree.

Let us now understand what are the factors behind the rally in the Indian stock market.

6 factors helping in Sensex, Nifty surge

1 - Bargain buying

The Sensex and Nifty witnessed a sharp correction recently which has led buying of good quality stocks at cheaper prices.

Both Nifty and Sensex fell over 8.50 per cent and 7.36 per cent respectively from their record peak.

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2 - Robust GST collection

The December 2024 GST mop up rose by 7.3 per cent year-on-year to Rs 1.77 lakh crore, signaling a rebound in consumption activities.

Experts and analysts believe that this uptick indicates towards improving economic momentum, which could further enhance sentiments of investors.

3 - Q3 earnings optimism

The expectations from the Q3 earnings have increased following strong business updates from key sectors including automotive and financials.

Major players such as Maruti Suzuki, Mahindra & Mahindra, and CSB Bank have reported promising trends, offering a positive outlook.

“Luxury consumption sectors such as jewellery, aviation, and hospitality are expected to deliver robust numbers,” VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

4 - Boost in IT sector

One of the key drivers of the rally on Thursday was the IT sector whose index rose by a per cent during the day. CLSA and Citi both are projecting an improved revenue growth for IT companies in the December quarter, supported by stable demand and the recent rupee depreciation.

5 - Rally in auto stock

Nifty Auto gained by more than 2 per cent during the day’s trade at 23,615.70 after the data from the Indian automobile industry showed the domestic passenger vehicle (PV) wholesales rose by 11 per cent year-on-year in December to 320,000 units. This surge was driven by strong demand for SUVs, a robust recovery in the urban market, year-end discounts, and massive sales of CNG-powered cars.

6 - Positive technical trends

The Nifty 50 moved above its 200-day moving average, a crucial technical indicator, aiding the rally.

“Having achieved 23,770, consolidation was expected. A move above 23,850 can push the index towards 24,025,” Anand James, Chief Market Strategist, Geojit Financial Services, said.

He further said that while volatility remains a concern, a collapse appears unlikely at this stage.

Meanwhile, Jigar S Patel, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers, said: “Nifty formed a bullish Bat pattern coupled with bullish divergence, triggering a strong upward movement of 600 points from the bottom of 23,460. This technical setup signals potential further bullish momentum. Looking ahead, 23,800 acts as a significant support level, which will be crucial in maintaining the upward trend. On the upside, 24,200 serves as a key resistance level. A decisive close above 24200 could pave the way for further gains, potentially pushing Nifty towards 24,500 in the near term.”

Investors got rich by Rs 5.8 lakh crore

Due to the upward move of the Indian stock market, investors’ wealth soared by around Rs 5.8 lakh crore, as the market capitalisation of BSE-listed companies rose to Rs 450.32 lakh crore lakh crore, from Rs 444.43 lakh crore in the previous session.

With inputs from agencies.