SENSEX surges over 1,000 points, NIFTY50 scales mount 25K; key factors behind market rally

The Indian equity benchmarks snapped their three-day losing streak on Friday, June 20, after relaxed project financing norms for banks and NBFCs by Reserve Bank of India and continuous buying by foreign institutional investors lifted bullish sentiment, analysts said. The SENSEX rose as much as 1,133 points and NIFTY50 index reclaimed its important psychological level of 25,100 powered by gains in index heavyweights like Reliance Industries, HDFC Bank, ICICI Bank, Bharti Airtel, State Bank of India and Mahindra & Mahindra.

The SENSEX ended 1,046 points higher at 82,408 and NIFTY50 index advanced 319 points to close at 25,112.

FII buying

Bullish sentiment on Dalal Street got a boost from continuous buying by foreign institutional investors. FIIs have been buying shares in the Indian equity markets since last three sessions. FIIs have purchased shares worth ₹3,309 crore in the cash segment alone.

In the derivative segment, FIIs have bought index options worth ₹1,284 crore.

Meanwhile, inflows by domestic institutional investors have remained robust as they have piled up on shares worth ₹59,836.18 crore so far this month.

Boost from heavyweights

Buying in index heavyweights also supported the up move in Friday's session. Gains in index bellwethers like HDFC Bank, Reliance Industries, ICICI Bank, Bharti Airtel, Mahindra & Mahindra, State Bank of India, ITC and Larsen & Toubro contributed over 500 points towards gain in the SENSEX, data from BSE showed.

Analysts said that after days of rangebound trading and subsequent correction in various sectors led to value buying has emerged at lower levels.

Sectoral landscape

Strong buying interest was visible across board as all the major sector gauges compiled by the National Stock Exchange were trading higher led by the NIFTY PSU Bank index's 2.13% gain. PSU banks came under buying interest after the Reserve Bank of India eased project financing norms for banks and NBFCs.

NIFTY Realty, Infrastructure, Metal, Bank, Financial Services and Private Bank indices also rose over 1% each.

Mid- and small-cap shares were also witnessing strong buying interest as NIFTY Midcap 100 index advanced 1.13% and NIFTY Smallcap 100 index climbed 1.22%.

In the NIFTY Midcap 100 index 80 shares were trading higher led by Waaree Energies’ 7.33%, Premiere Energies, NTPC Green, IREDA, Max Healthcare and LIC Housing Finance were also among the gainers.

NIFTY50 gainers and losers

Mahindra & Mahindra was top gainer in the NIFTY50 index, the stock surged 2.85% to ₹3,183. Jio Financial Services, Shriram Finance, HDFC Life, JSW Steel, Power Grid and Bharti Airtel also rose between 2%-2.8%.

On the flipside, Hero MotoCorp, Maruti Suzuki, Apollo Hospitals, Bajaj Finance and Dr Reddy's Labs were among the notable losers.

The overall market breadth was extremely positive as 2,518 shares were advancing while 1,195 were declining on the BSE.