Benchmark stock market indices surged on Wednesday, ending close to an all-time high and breaking a 3-day downtrend as optimism grew around potential US Federal Reserve interest rate cuts. The S&P BSE Sensex soared 1,022.50 points, finishing at 85,609.51, while the NSE Nifty50 climbed 320.50 points to close at 26,205.30.
Geojit Investments Limited’s Head of Research, Vinod Nair, noted that the domestic stock market saw substantial growth, propelled by the festive “Santa Claus rally” in global markets. Retail and domestic institutional investor (DII) inflows played a key role in driving this uptrend, while foreign institutional investor (FII) flows remained moderate. Positive market sentiment worldwide was fueled by expectations of a Federal Reserve rate cut in December, coupled with lower US yields and a weakened dollar. Additionally, a 1% drop in crude oil prices helped allay inflation concerns.
Leading the gainers were Bajaj Finance, up 2.52%, and Bajaj Finserv, rising by 2.51%. Tata Steel saw a 2.04% increase, Reliance Industries gained 1.99%, and Sun Pharmaceutical Industries added 1.95%. These top performers bolstered overall market sentiment, particularly with strong buying activity observed in financial and metal sectors.
Conversely, Bharti Airtel experienced a 1.56% decline, while Asian Paints slipped marginally by 0.03%, standing as the sole two stocks in the negative territory among the top losers.
Looking ahead, Nair highlighted expectations of a 25-basis point rate cut by the Reserve Bank of India (RBI) in December, backed by moderating inflation and a dovish policy stance. Furthermore, growing optimism surrounding a potential de-escalation in tensions between Russia and Ukraine is fostering a positive outlook for the upcoming year.
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