Four Key Reasons Behind Sensex’s 1,000+ Point Surge on Wednesday

On Wednesday, Indian equity markets made a strong recovery, ending a three-day losing streak. Both the Sensex and Nifty 50 saw impressive gains, with the Sensex soaring by over 1,000 points and the Nifty climbing more than 300 points. The Sensex closed at 85,609.51, while the Nifty ended the day at 26,205.30, marking its best single-day performance in the past six months. The Bank Nifty reached a fresh all-time high, gaining 1.2 per cent.

Several factors contributed to the market’s positive turn, and among the major drivers, were the performance of key stocks. HDFC Bank, Reliance Industries, ICICI Bank, and Infosys were instrumental in pushing the Nifty higher, adding a combined 143 points. Reliance Industries also reached a new 52-week high during the session, reflecting the overall upbeat sentiment.

There were four significant catalysts behind this strong rally:

1. Anticipation of a Fed Rate Cut in December
   The possibility of the Federal Reserve implementing a rate cut in December helped renew investor optimism, both globally and locally.
2. Positive Sentiment Around US–India Trade Relations
   Growing optimism about a potential trade agreement between the US and India played a crucial role in driving market sentiment.
3. FII Net Inflows
   Foreign Institutional Investors (FIIs) became net buyers on November 25, purchasing ₹785.30 crore worth of equities.
4. Decline in Crude Oil Prices
   A notable dip in crude oil prices, which fell to a five-week low, provided further support to the rally. This decline came in the wake of reports suggesting a potential peace agreement between Ukraine and Russia.

The rally wasn’t just confined to a few stocks—sectoral indices also saw significant movement. The Nifty Metal index stood out with a remarkable 2 per cent gain, driven by strong performances across the sector, though Adani Enterprises was the sole exception. The Nifty Energy index also saw a solid 1.74 per cent rise.

Broader market indices, too, posted strong results. The Nifty Midcap 100 and Small-Cap 100 indices recorded their best single-day performance since early September, with gains of 1.26 per cent and 1.37 per cent, respectively. The overall market breadth was solidly in favor of advancing stocks, with 2,134 stocks ending the day in the green, compared to just 561 stocks in the red.

Among the key stocks driving the Nifty’s rally, HDFC Bank, Reliance Industries, and ICICI Bank were the top contributors, adding substantial points to the index. HDFC Bank contributed +50.92 points, Reliance Industries added +44.4 points, and ICICI Bank contributed +26.92 points. However, there were some laggards as well, with Bharti Airtel, Eicher Motors, and Adani Enterprises acting as the primary draggers, subtracting points from the index.

Disclaimer: The content of this article is for informational purposes only and should not be considered as investment advice.