After weeks of slowdown, finally, the Indian stock market is showing signs of recovery. Today for the second consecutive session, the market has been moving upward. During the early hours of the trading session, the Sensex rallied up 1323.37 points, which is around 1.67% up from the previous close. Nifty 50 also gained around 408 points rallying 1.7%. All sectors were in the green, which has been a rare sight in the recent past. So, what has turned positive for the market? What is driving the stock market indices upwards? Let us find out.
Key Triggers for Today’s Market Rally
- Maharashtra Election Results: The primary reason for the present market rally is the landslide victory of the NDA government in Maharashtra. The party swept the assembly polls with a clear majority of 233 seats out of 289. This indicates the political stability in the state which in turn is positive for government policies continuation and thus for the markets’ wellbeing.
- Easing FII Offloading of Equities: FIIs are continuously selling Indian equities; however, the momentum has come down. On Friday, 22 November, the FIIs sold equities in the cash market worth around ₹ 1278 crore, and this is the lowest selling since the beginning of November. It is quite lower than the preceding session when FIIs offloaded ₹ 5000 crore in a day. This also led to Friday’s market rally when the markets gained over 2%, the highest single-day gain in the past five months.
- Global Market Cues: Asian and the US markets are surging and have a great momentum, which is also being inflected to Indian markets. Japan’s Nikkei gained around 1.17% in the previous session, while South Korea’s Kospi increased by 1.44%.
- MSCI Rejig: Another reason for today’s market rally could be the November rebalancing of the MSCI index. This rejig can bring in an inflow of around $1.7 billion in funds into the Indian equity markets. Thus, investors are optimistic about the market today. The stocks that can gain the most include HDFC Bank and the other five stocks. Apart from large-cap companies, the smallcap index of MSCI and thus the smallcap stocks can also witness a good inflow of funds.
- Recovery of Adani Group: Investors showing faith in the Adani group stock overlooking the ongoing bribery case row. The company refuses all claims to be untrue and baseless.
Sectoral Performance
The sectoral market indices are displaying a great sight where all of the Nifty sectoral indices are in green. The PSU Banks, oil & gas, and realty sector have been the primary forces behind the market rally today. The Nifty PSU Banks index gained over 4% until 2:23 pm today, while the oil & gas sector gained over 3% and Nifty Realty close to 2.8%.
Market Outlook
Though the rally in the market has been quite significant this time, however, the sustainability of the market depends on the FII activity, global cues, domestic demand, and geopolitical developments. Today the volatility has dropped to negative but the volatility is here to stay until markets get more clarity on geopolitical developments in the Middle East and the US.
Source: MoneyControl
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