Sensex jumps 860 points in early trade—Here we decode why
What's the story
The Indian stock market is on a strong rally, its second consecutive week of massive gains. The rally is largely propelled by strong foreign inflows and a recovery in domestic economic indicators.
The benchmark indices started the week on a high, with the Nifty 50 index opening at 23,515.40, up by 165 points or 0.71%.
Meanwhile, Sensex surged by an impressive 860 points or 1.12%, to hit 77,769.54 points.
Previous performance
Indices outperform with over 4% gains last week
The positive momentum in the stock market comes after a stellar performance last week, when both indices gained over 4%, marking their best weekly performance in four years.
Despite global economic uncertainties and geopolitical tensions, India's domestic economy continues to show signs of recovery.
Banking and market expert Ajay Bagga said India stood out last week with a sharp rise in benchmark indices and Foreign Portfolio Investors (FPIs) turning net buyers after many months.
Economic recovery
Government spending on infrastructure has increased significantly
Bagga further highlighted India's economy is on the mend with government spending on infrastructure rising from ₹20,000 crore/month in mid-2024 to ₹90,000 crore/month in December and January.
The increased spending has added to the positive sentiment in the market.
Among sectoral indices, Nifty Realty saw the biggest surge while Nifty IT and Nifty Media opened with gains of up to 0.66% and 0.88%, respectively.
Market trends
Analysts are closely monitoring key resistance levels
In the Nifty 50 index, L&T, Power Grid Corporation, NTPC and Kotak Bank were the top gainers.
Meanwhile, Dr. Reddy's, Ultratech Cement, Tata Consumers, Titan and Cipla were among the top losers in early trade.
Analysts are closely watching key resistance levels for further market movements.
A breakout above 23,800 would strongly signal a bullish trend according to Sunil Gurjar of Alphamojo Financial Services.