Sensex soars 500 points: Check reasons behind today's rally
What's the story
India's equity benchmarks witnessed a strong rally on Wednesday, with Sensex gaining over 500 points and broader indices rising up to 2.5%.
The rally was mainly fueled by strong global cues and optimism over the outcome of the US Federal Reserve's meeting.
Media, IT as well as mid- and small-cap stocks saw a surge in buying interest.
Sensex climbed 519 points or 0.68% to hit a high of 76,420, while Nifty gained 169 points or 0.73% to reach 23,126.
Investment trends
Global tech stocks and mid-cap shares fuel market rally
The market rally was driven by gains in technology stocks across Asian markets, mirroring a rebound in Wall Street equities.
US stocks rose overnight as AI-related technology shares, including NVIDIA, staged a strong recovery.
The Nasdaq rose 2% while NVIDIA bounced back 8.9% after a sharp fall in its previous session that wiped out $593 billion from its market capitalization.
Market shift
Investor interest shifts to mid- and small-cap stocks
After a recent correction, mid- and small-cap stocks drew investor interest.
The Nifty Midcap 100 and Smallcap 100 indices saw strong buying as valuations looked attractive, surging 1.98% and 2.5%, respectively.
Top gainers from these segments included Inox Wind, Suzlon Energy, and CG Power and Industrial Solutions.
Fed influence
US Federal Reserve's decision impacts Indian market
The Indian market was also impacted by the US Federal Reserve's likely decision to keep its benchmark interest rate unchanged in the 4.25-4.50% range.
Despite today's rebound, the Sensex and Nifty remain down 12% from their record highs of September 2024.
The Nifty Midcap index has declined by 9.1% year-to-date, while the Nifty Smallcap index has plummeted further by 14.71%.