Sensex jumps 700 points to conquer Mt 72K. Key factors behind the post-Christmas bash
Sensex rallied over 700 points on Wednesday to scale the 72,000 mark for the first time. Nifty, too, hit a fresh all-time peak of 21,654.75 amid all-round buying in banks, auto, metals and IT stocks.
The market rally was broad-based but Nifty's 1% rise left smallcap and midcap indices behind as investors found more value in bluechips after the non-stop rally seen in smaller stocks.
UltraTech Cement ended over 4% higher, along with other cement stocks, after Nomura upgraded the sectoral outlook. Among bluechips, Hindalco and Bajaj Auto ended 4% higher while heavyweight HDFC Bank advanced 1%.
The combined market capitalisation of all BSE-listed stocks rose by Rs 2.5 lakh crore to Rs 361.4 lakh crore.
Here are the key factors behind today's rally:
1) Global markets
As investors continue to believe that the US Fed may cut interest rates as early as March 2024, a positive momentum was seen across global equity markets on Wednesday.
Japan's Nikkei ended 1.15% higher, Hong Kong's Hang Seng 1.74% and London's FTSE100 0.57%.
On Tuesday, Wall Street stocks continued their positive momentum, with the Dow and broad-based S&P 500 both rising 0.4%, while the tech-rich Nasdaq Composite Index climbed 0.5%.
2) Santa Claus rally effect
Markets are known to follow seasonal patterns and Santa Claus rally, which is usually seen in the last five trading days of December and the first two sessions of January, is one such pattern that seems to be playing out in the market now.
During this 7-day period, Nifty has a track record of giving positive returns in the last 19 out of 22 years.
3) FII hand
The chorus for 'Sell China, Buy India' strategy seems to be growing louder on Wall Street. NSDL data shows that FIIs have been net buyers to
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