Sensex Climbs 1,300 Points, Investor Wealth Swells By Rs 9 Lk Cr; Why Is Market Rising

Benchmark Indian equity indices, BSE Sensex and Nifty 50, were trading higher on Monday, driven by the BJP-led Mahayuti alliance’s victory in the Maharashtra elections. Broad-based buying was observed across all sectors.

At 9:31 am, the BSE Sensex was up by 1,305 points, or 1.65 per cent, at 80,423, while the Nifty 50 gained 413 points, or 1.73 per cent, trading at 24,321. The market capitalization of all listed companies on the BSE surged by Rs 8.66 lakh crore, reaching Rs 441.37 lakh crore.

After recent corrections, both indices have risen nearly 4 per cent in the last two trading sessions. The BJP-led NDA secured 233 out of 288 seats in Maharashtra, while the opposition alliance triumphed in Jharkhand.

Among the 30 stocks in the BSE Sensex index, only two—JSW Steel (down 1.22 per cent) and Infosys (down 0.33 per cent)—were trading lower. On the other hand, major gainers included L&T (up 3.18 per cent), Mahindra & Mahindra, Adani Ports & SEZ, SBI, and Reliance Industries.

Similarly, on the Nifty 50, 49 of the 50 constituent stocks were in the green. JSW Steel was the only laggard, impacted by its exclusion from the BSE Sensex index. Leading the gains were Shriram Finance (up 4.51 per cent), Mahindra & Mahindra, Adani Enterprises, BEL, and NTPC.

All sectoral indices were also in the positive territory, with the PSU Bank index posting the largest gain of 3.17 per cent. The OMC, Realty, and Nifty Bank indices followed, each up more than 2 per cent.

In the broader markets, the Nifty Smallcap 100 rose by 1.83c, and the Nifty Midcap 100 gained 1.79 per cent.

Key Drivers Behind Today’s Market Rally:

BJP-led Mahayuti Alliance’s Maharashtra Win:

Indian equity markets reacted positively to the BJP-led Mahayuti alliance’s overwhelming victory in Maharashtra, which ended years of political uncertainty in one of the country’s most industrialized states. The BJP-led NDA secured 233 out of 288 seats.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that the Maharashtra election results have lifted market sentiment, aided by easing FII selling and strong liquidity. He highlighted the importance of monitoring foreign outflows, which are likely to taper off as FIIs enter the December holiday period. “If FIIs turn net buyers, we could see a strong rally,” he added.

FII Outflows:

On Friday, Foreign Institutional Investors (FIIs) sold Rs 1,278 crore in cash markets, marking the lowest outflow since the start of the month and significantly lower than the previous day’s Rs 5,000 crore in sales. This shift contributed to a market rally of over 2 per cent, marking its largest single-day gain in five months.

Rebound in Adani Stocks:

Adani Group stocks, which had lost over $28 billion in market value over the past two sessions, saw a strong rebound, with gains of up to 7 per cent. Adani Energy Solutions saw the biggest jump, rising 6 per cent to Rs 688, while Adani Enterprises, Adani Green Energy, and Adani Total Gas rose by 3-4 per cent. Other Adani stocks like Adani Wilmar, Adani Ports, ACC, and Ambuja Cement also saw gains.

MSCI November Rejig:

Positive sentiment was further bolstered by the inclusion of BSE, Voltas, Alkem Laboratories, Kalyan Jewellers, and Oberoi Realty in the MSCI Global Standard Index as part of the latest rejig. These changes took effect today.

India is expected to see net FII passive inflows of approximately $2.5 billion due to the MSCI rebalance, according to Nuvama Alternative & Quantitative Research.

Rally in the Heavyweights:

Heavyweight stocks contributed significantly to the Sensex’s 1,200-point rally. Reliance Industries, HDFC Bank, ICICI Bank, L&T, and SBI collectively added over 700 points to the overall rally, with these stocks rising between 2 per cent and 3.5 per cent. Additionally, the Nifty PSU Bank index surged over 4.5 per cent, led by gains in Central Bank of India, PNB, UCO Bank, and Bank of Baroda.