Stock Market today : Indian Stock Markets Surge: Sensex and Nifty Hit Record Highs
Stock Market today : Indian stock markets experienced a dramatic surge on Thursday, September 12, 2024, with both the BSE Sensex and Nifty 50 reaching unprecedented levels. The Sensex soared 1,593 points, or 2%, to a record high of 83,116 intraday. Meanwhile, the Nifty50 climbed 415 points, hitting an all-time peak of 25,433.
Key Stock Performers
Among the major contributors to this rally, Bharti Airtel led the charge with a nearly 4% increase on both the NSE and BSE. Other notable gainers included Hindalco, NTPC, Shriram Finance, Hero MotoCorp, ONGC, Wipro, Adani Ports, M&M, JSW Steel, Grasim, Bajaj Auto, Tata Steel, and Apollo Hospitals. These stocks advanced between 2% and 3.7%, reflecting broad-based enthusiasm across sectors.
Reasons Behind the Rally
Several factors contributed to the sudden and substantial rise in stock indices:
1. Short Covering Drives Nifty Surge
Analysts attribute part of the Nifty’s rally to short covering, especially in the range of 25,150-25,200, coinciding with the weekly futures and options (F&O) expiry. Significant open interest was observed in Nifty Options, particularly in the 24,500 Put (6.99 million contracts) and 25,000 Call (11.6 million contracts), indicating a bearish sentiment from sellers. Active trading was concentrated around 24,900-24,950 Calls and 24,700-24,800 Puts, with the Put-Call Ratio (PCR) dropping to 0.60 from 0.78, signaling a shift towards a more cautious market environment. According to Dhupesh Dhameja, a technical analyst at SAMCO, the 25,000 level was crucial for potential trend reversals.
2. Rally in Metal Stocks
The metal sector witnessed a significant upswing during the afternoon trading session. The Nifty Metal index surged 3% to 9,292 levels intraday. Key metal stocks that performed well included Hindalco, which rose 4.5%, Nalco up 4%, NMDC and Vedanta increasing by 3.8% each, and Jindal Steel advancing by 3.4%. SAIL, JSW Steel, Hindustan Zinc, Tata Steel, and Hindustan Copper also experienced gains of up to 3%.
Stock Market today Highlights, Sept 12: Benchmarks log record close
3. Easing of India-China Tensions
The stock market rally was further bolstered by easing geopolitical tensions between India and China. Minister of External Affairs S. Jaishankar’s statement in Geneva that India and China had made “some progress” on border negotiations contributed to investor confidence. Jaishankar mentioned that 75% of disengagement issues had been resolved, which alleviated some of the regional uncertainty.
4. Falling India VIX
The India VIX, a measure of market volatility, dropped nearly 4% intraday to a low of 11.04. This decline in the fear gauge, which fell below 15, suggested strengthening bullish momentum as investor confidence grew.
5. Global Market Trends
The rally in Indian markets was also influenced by positive trends in global markets:
US Stock Futures
US stock futures were on the rise as investors anticipated new inflation and labor data. The Dow Jones Industrial Average futures climbed 68 points, or 0.18%, while S&P 500 futures and Nasdaq 100 futures inched up by 0.19% and 0.27%, respectively. This followed a strong close on Wednesday, with the S&P 500 ending the day up by 1.07%, marking its first gain since October 2022. The Dow Jones gained 0.31%, recovering from a decline of 743.89 points earlier in the session, while the Nasdaq Composite closed 2.17% higher, rebounding from an earlier drop.
European Markets
European stocks also rallied, with the pan-European Stoxx 600 index increasing by 1.07% in early trade. All sectors and major bourses were in the green, with tech and mining stocks leading the gains, rising 2.5% and 2.05%, respectively. Investors in Europe were also awaiting the latest monetary policy decision from the European Central Bank.
Asian Markets
Asian markets showed strong performance as well. Japan’s Nikkei index closed 3.4% higher, South Korea’s Kospi advanced 1.6%, and Australia’s ASX200 added 1.1%. This broad-based regional strength contributed to the overall positive sentiment in global markets.
Conclusion
The sudden rally in Indian stock markets on September 12, 2024, was driven by a confluence of factors including significant short covering, a strong performance in metal stocks, easing geopolitical tensions, a drop in market volatility, and positive global market trends. The Sensex and Nifty 50 reaching record highs reflect a robust market sentiment, supported by both domestic and international influences. As investors continue to monitor these developments, the positive momentum in the Indian stock markets could potentially set the stage for further gains in the near future.