Markets close in green after five-month lows on Adani case; why the sudden rise?

Domestic markets on Friday, November 22, saw a sharp recovery with Sensex closing nearly 2.54% (1,961 points) up and Nifty 50 ending 2.39% (557 points) higher. The gains were led by Reliance, Infosys and ICICI Bank, among others.

The Sensex began the session at 77,349.74, up from its previous close of 77,155.79 and the Nifty 50 at 23,411.80, higher than its previous close of 23,349.90.

The overall market capitalisation of listed firms on the BSE rose by ₹7.3 lakh crore in a single day to ₹432.7 lakh crore, from the previous close of ₹425.4 lakh crore. All sectoral indices on the Nifty except for Nifty Media, which declined by 0.32%, saw an upward trend.

Why the sudden rise, and will it last?

Experts noted that the domestic markets observed healthy buying trends among investors after Thursday’s selling, showing a ‘smart recovery’, as per a report by Live Mint. According to the experts, the market growth was due to technical factors and not fundamental ones, which means that there was still a lack of unique positive triggers for the market, the report added.

Some reports suggest that the rally can be credited to strong US labour market data and job growth. Reportedly, the buying also seemed to be encouraged by the recent declines as investors attempted to capitalise on the same.

However, experts remain cautious over the surge due to global uncertainty and other domestic factors that can impact the situation, the Live Mint report noted.

Other national and global happenings like the Maharashtra Election results and Donald Trump’s policies as he gears up for his second term can have a significant impact on the market.

Market gains today

Strong buying by domestic institutional investors and a firm trend in the US markets also helped the indices, traders said, as per a PTI report.

Stocks including State Bank of India, Tata Consultancy Services, Titan, ITC, Infosys, Larsen & Toubro, Reliance Industries and Bajaj Finance were the biggest gainers. While all of the 30 stocks on Sensex ended up in the green, only one stock on Nifty 50, Bajaj Auto, closed in the red.