Sensex surges 2,000 points, Rs 7 lakh crore added: 4 key factors behind market rally

The Sensex was up 2039.44 points to 79,195.23 at 2:57 pm, while the NSE Nifty50 gained 587.90  to 23,938.75.

In Short

• Sensex and Nifty witness strong rally driven by banking, IT, and energy sectors
• Adani Group's recovery boosts market sentiment
• BSE market cap increases by Rs 7 lakh crore

Benchmark indices witnessed a strong recovery rally on Friday, driven by strong buying across sectors such as banking, financial, IT, and energy. A recovery in Adani Group stocks further lifted market sentiment, pushing the indices higher.

At 2:57 PM, the BSE Sensex surged 2,039.44 points to reach 79,195.23, while the NSE Nifty50 climbed 587.90 points to trade at 23,938.75.

The strong performance resulted in a significant boost to the market capitalisation of the BSE, which increased by Rs 7 lakh crore.

FINANCIALS, IT, AND ENERGY STOCKS LEAD GAINS

The rally was spearheaded by banking and financial heavyweights like ICICI Bank and SBI, along with IT majors such as Infosys and TCS. Energy giant Reliance Industries and infrastructure leader L&T also contributed significantly to the market's upward trajectory.

The widespread gains reflected robust investor sentiment across key sectors, with banking and IT stocks showing particular resilience.

Vishnu Kant Upadhyay, AVP - Research and Advisory at Master Capital Services, said, “The key benchmark indices witnessed a significant rebound, with the Nifty50 gaining over 500 points and the BSE Sensex surging 2,000 points. This recovery was marked by a sharp rebound above the critical 200-day EMA, supported by strength in Banking and IT stocks.”

"Bargain hunting in heavyweight stocks at attractive valuations boosted investor sentiment. Rising dollar index enhanced the appeal of IT stocks," Upadhyay added.

"Additionally, market sentiment was buoyed by exit polls from the Maharashtra election, indicating a likely victory for the Mahayuti alliance. This would mark the BJP-led NDA’s second consecutive state assembly win, following Haryana, which is seen as a positive signal for renewed government-led capital expenditure initiatives," he added.

ADANI GROUP RECOVERY LIFTS SENTIMENT

Moreover, Adani Group stocks rebounded sharply, recovering from early losses and the declines seen in the previous session.

Flagship Adani Enterprises rose 2.5%, while Ambuja Cement and ACC posted gains of 6% and 4%, respectively.

The recovery came after the group categorically dismissed allegations of bribery and fraud against its chairman, Gautam Adani, as "baseless," which helped restore some investor confidence.

FII-DII ACTIVITY AND MARKET BREADTH

Market breadth remained positive, with 2,365 stocks advancing on the BSE and 147 stocks hitting their 52-week highs. In contrast, 1,422 stocks declined, and 155 remained unchanged.

Foreign institutional investors (FIIs) sold shares worth Rs 5,320.68 crore in the previous session, but their selling was largely offset by domestic institutional investors (DIIs), who made net purchases of Rs 4,200.16 crore.

SECTORAL HIGHLIGHTS

Sectoral indices reflected broad-based gains, with Nifty IT, Financial Services, and Oil & Gas outperforming the broader index. Gains in these indices ranged from 1.3% to 1.7%, underlining strong sector-specific momentum.

Friday’s market performance underscored a revival in investor sentiment, buoyed by sectoral strength and a recovery in high-profile stocks.