SENSEX surges 835 points, investors’ wealth swells by ₹3.25 lakh crore; here are key factors driving the rally

The Indian equity benchmarks staged a strong bounce back on Wednesday after witnessing selling pressure in the previous session. The SENSEX rose as much as 835 points and NIFTY50 index reclaimed its important psychological level of 24,900 led by gains in index heavyweights like HDFC Bank, ICICI Bank, Mahindra & Mahindra, Reliance Industries, Larsen & Toubro and Bharti Airtel. As of 10:56 am, the SENSEX was up 749 points at 81,935 and NIFTY50 index advanced 242 points to 24,926. With today’s surge investors’ wealth soared by ₹3.25 lakh crore, data from BSE showed.

Boost from Moody’s

The bullish sentiment for equities got a revival after global credit ratings agency Moody's said that India is well-positioned to deal with the negative effects of US tariffs and global trade disruptions as domestic growth drivers and low dependence on exports anchor the economy.

In a note on India, the agency said government initiatives to boost private consumption, expand manufacturing capacity and increase infrastructure spending will help offset the weakening outlook for global demand.

Easing inflation offers the potential for interest rate cuts to further support the economy, even as the banking sector's liquidity facilitates lending.

Pharma shares lead gains among sector gauges

Meanwhile, 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 Pharma index's 2% gain. Pharma shares came under buying interest as strong earnings report by Gland Pharma and Torrent Pharma ignited bullish sentiment for drugmakers.

Eighteen out of 29 shares in the NIFTY Pharma index were trading higher led by Gland Pharma's nearly 4% gain. Torrent Pharma, Aurobindo Pharma, Cipla, Ajanta Pharma and Granules India also rose between 2%-3%.

High beta auto, banking, FMCG, IT, financial services and realty shares were also witnessing buying interest thereby lending support to the up move in the benchmarks.

Broader markets were also witnessing buying interest as NIFTY Midcap 100 index rose nearly 1% and NIFTY Smallcap 100 index advanced 0.6%.

NIFTY50 gainers and losers

Buying interest was so strong that 48 shares in the NIFTY50 index were trading higher. Bharat Electronics was top gainer in the NIFTY50 basket of shares. The stock rose nearly 4% to ₹377 after reports suggested that its management expects orders worth ₹27,000 crore in current financial year.

Cipla (2.30%), Bajaj Auto (2.22%), Sun Pharma (2.06%) and Bajaj Finance (1.76%) were also among the gainers.

On the flipside, IndusInd Bank and Shriram Finance were among the notable losers in the NIFTY50 index.

The overall market breadth was positive as 2,325 shares were advancing while 1,228 were declining on the BSE.