What Sparked the Stock Market's Recovery? Insights on Sensex and Nifty's Surge!
Market Recovery After a Three-Day Decline
Mumbai: The benchmark stock indices, Sensex and Nifty, experienced a rebound of nearly 1% on Monday, breaking a three-day losing streak, thanks to a surge in shares of Reliance Industries and Sun Pharma, along with favorable global market trends.
The BSE Sensex, comprising 30 shares, rose by 639.42 points, or 0.83%, closing at 77,303.63. At its peak during the day, it soared by 755.83 points, reaching 77,420.04.
Meanwhile, the NSE Nifty climbed 194.75 points, or 0.81%, finishing at 24,092.70.
Among the firms listed on the Sensex, Sun Pharma saw a significant increase of 7% following its announcement of acquiring US-based Organon & Co in an all-cash deal valued at USD 11.75 billion, marking one of the largest overseas acquisitions by Indian companies.
Reliance Industries also saw a rise of 2.88%. Other notable gainers included Adani Ports, Tech Mahindra, Mahindra & Mahindra, NTPC, HCL Tech, and Tata Consultancy Services.
Conversely, Axis Bank, Bharat Electronics, Trent, and ICICI Bank were among the underperformers in the blue-chip category.
In the Asian markets, South Korea's Kospi, Japan's Nikkei 225, and Shanghai's SSE Composite indices all closed higher, while Hong Kong's Hang Seng index ended in the red.
European markets were also trading positively, and US markets mostly finished higher on Friday.
According to Hariprasad K, a Research Analyst and Founder of Livelong Wealth, "A significant factor contributing to today's market strength was the improving global sentiment, particularly the potential easing of tensions between the US and Iran regarding the Strait of Hormuz. This development alleviated concerns over supply disruptions and bolstered global risk appetite, aiding domestic markets in their recovery."
He emphasized that sectoral participation was crucial in maintaining the rally.
Hariprasad further noted, "The pharmaceutical sector experienced robust activity, primarily driven by Sun Pharmaceutical Industries' substantial acquisition announcement. Additionally, the IT sector rebounded notably after a period of underperformance."
Brent crude, the global oil benchmark, was trading 2.53% higher at USD 107.9 per barrel.
Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, stated, "Indian equities kicked off the week positively, buoyed by improved sentiment amid renewed hopes for de-escalation in the Middle East. Gains were widespread, with all major sectoral indices closing in the green. Overall, the markets displayed resilience but remain highly responsive to geopolitical events."
Exchange data indicated that Foreign Institutional Investors (FIIs) sold equities worth Rs 8,827.87 crore on Friday.
On the previous Friday, the Sensex had fallen by 999.79 points, or 1.29%, closing at 76,664.21, while the Nifty dropped 275.10 points, or 1.14%, ending at 23,897.95.