Sensex gains over 1,200 points: 5 factors driving today's rally
What's the story
India's benchmark indices witnessed a massive rally today, with the BSE Sensex jumping over 1,200 points and the Nifty 50 rising over 350 points to cross the 24,100 mark.
The rally was largely led by gains in financial, auto and IT stocks ahead of the quarterly earnings season.
At the time of writing, Sensex and Nifty were trading at 79,757 and 24,136, respectively.
The market capitalization of all BSE-listed companies also rose by ₹2.92 lakh crore to ₹447.35 lakh crore.
Auto boost
Auto sector's robust sales fuel market rally
The auto sector contributed the most to today's market rally, with Eicher Motors leading the surge by 7% after Royal Enfield sales grew by 25% year-on-year.
Maruti Suzuki also rose by a whopping 4.5%, after posting a 30% YoY increase in December sales.
Other companies such as Mahindra & Mahindra and Ashok Leyland saw their shares gain over 4%, owing to better-than-expected December sales.
IT surge
IT stocks rise on projected revenue growth
The IT index, the second-largest sector after financials, jumped nearly 2% after CLSA and Citi forecasted further revenue growth for the sector in the December quarter and through 2025.
Major IT players including Infosys, TCS, HCL Tech and Tech Mahindra together added over 300 points to Sensex's rally today.
The rise was attributed to steady demand and the recent depreciation of the rupee.
Economic outlook
Bernstein's strategy suggests economic recovery
Bernstein's India strategy for 2025 indicates that the economy has bottomed out and growth should pick up within 1-2 quarters.
"With the 5% growth in September and a low industrial growth, we believe this phase represents a bottoming. With policy actions uncertainties dissolving ahead, and a base reset, the growth may start picking up in 1-2 quarters," Bernstein said.
They recommend investing ahead of the recovery despite some risks to FY26 earnings.
Financial recovery
Banking and financial stocks rebound strongly
Banking and financial stocks also staged a strong comeback, adding to the indices' rally.
Bajaj Finserv and Bajaj Finance led the recovery with a jump of nearly 6% and 8%, respectively.
Other private lenders such as HDFC Bank, Kotak Mahindra Bank, and IndusInd Bank also contributed to the gains.
This recovery in banking and financial stocks was a major contributor to today's market surge.