Bulls Charge: Sensex Leaps Over 1,300 Points - Here’s Why the Market is Surging Today - January 02, 2025

Amid losses in Asian markets, Indian benchmark equity indices experienced a significant surge on Thursday, fueled by strong performances in the financial, auto, and IT sectors ahead of the forthcoming quarterly earnings season.

The Sensex soared by 1,324.69 points (1.68%) to reach an intraday high of 79,832.10, while the Nifty50 climbed 409 points (1.7%) to hit a day's high of 24,151.9.

On the BSE, the top gainers were Bajaj Finance, Maruti Suzuki, Bajaj Finserv, Mahindra & Mahindra, and Infosys. Meanwhile, Sun Pharma, Adani Ports, NTPC, and SBI were the stocks on the downside.

What caused the BULL run?

Robust December Auto Sales
Auto stocks emerged as top performers, buoyed by strong December sales figures that defied the typical seasonal slowdown.

Leading the charge, Eicher Motors surged by 7% after reporting a 25% year-on-year increase in Royal Enfield sales, with 79,466 units sold in December compared to 63,887 units the previous year. Maruti Suzuki saw a 4.5% rise following a 30% increase in December sales, reaching 1,78,248 units, up from 1,37,551 units in December 2023. Mahindra & Mahindra and Ashok Leyland also experienced gains of over 4% due to better-than-expected sales figures.

Bargain Hunting Amid Market Correction
Recent corrections have made quality stocks more affordable, attracting those who buy in dips. The significant declines in the Nifty and Sensex from their record highs have prompted buying activity in stocks at lower price points. According to G Chokkalingam, Founder of Equinomics Research Pvt Ltd, the market correction is driving bargain buying in quality stocks at discounted prices.

IT Stocks on the Rise
The IT sector gained nearly 2%, spurred by positive revenue growth projections from CLSA and Citi for the December quarter and the entirety of 2025. Major IT stocks like Infosys, TCS, HCL Tech, and Tech Mahindra played a significant role in the Sensex rally, adding over 300 points to the index.

Recovery in Banking and Financial Stocks
Banking and financial stocks staged a strong recovery, with Bajaj Finserv and Bajaj Finance surging nearly 6% and 8%, respectively, contributing to the market's rally. Other private lenders like HDFC Bank, Kotak Mahindra Bank, and IndusInd Bank also posted significant gains.

Buying Activity on Expiry Day
In the last two weeks, the Nifty traded within a range of 23,500 to 23,900. A breakout above the upper range occurred on Thursday, driven by buying activity on the weekly expiry day.

Optimism Ahead of Union Budget 2025
Optimism surrounding the upcoming Union Budget 2025 is also boosting market sentiment. Gaurang Shah, Head Investment Strategist at Geojit Financial Services, anticipates a growth-oriented budget. Anchal Kansal, Senior Research Analyst at Green Portfolio PMS, expects a focus on public infrastructure, including highways, roads, and railways, which could benefit sectors like IT and pharma, especially with a strengthened dollar.

Technical View
Jigar S Patel, Senior Manager at Anand Rathi Shares and Stock Brokers, highlighted that Nifty formed a bullish Bat pattern, indicating further upward potential. As per him 23,800 is a key support level, and a break above 24,200 can signal additional gains, and could push Nifty towards 24,500.

Anand James, Chief Market Strategist at Geojit Financial Services, expects a period of consolidation following Nifty's rise to 23,770. Moves past 23,850 could drive the index to 24,025 range, although the volatility is likely to remain dominant.