Sensex Soars: 3 Key Reasons Behind Today's 694-Point Rally in the Indian Stock Market

After opening on a high note, Indian benchmark indices continued to gain momentum throughout the day. Both Sensex and Nifty demonstrated resilience and closed the day on a positive note, bolstered by strength in broader markets and selective sectors.

The Indian stock market rebounded sharply from intraday lows, showing a strong recovery. The benchmark indices surged more than half a percent as they traded higher amid positive sentiment and broader market support.

Market Recap: Key Highlights of the Day

On November 5, Sensex saw a jump of over 1,100 points from its day’s low, closing with a gain of 694 points or 0.9% at the bell. Meanwhile, the NSE Nifty closed higher by 217 points, marking a 0.9% rise, hovering close to the 24,200 level.

Leading the day’s performance were stocks like JSW Steel, Hindalco, and Axis Bank, which emerged as top gainers. Conversely, ITC, Coal India, and Trent saw declines, taking a hit during the trading session.

At the time of writing, GIFT Nifty was trading at 24,293, up by 172 points. Broader indices also showed strength, with the BSE MidCap and BSE SmallCap indexes ending higher by 0.5% and 0.4%, respectively.

Sectorally, it was a mixed day. Metal, banking, and finance sectors displayed notable buying interest, while FMCG and IT sectors experienced selling pressure. Some companies, like NALCO, P&G Health, and Gillette India, even hit their 52-week highs today.

The Indian rupee was trading at 84.11 against the US dollar. Commodity markets remained relatively calm, with gold prices on the MCX trading flat at Rs 78,441 per 10 grams, while silver prices rose 0.3% to Rs 94,566 per kg.

Three Key Factors Driving Today’s Market Rally

1 Index Heavyweights’ Strong Performance

One of the primary drivers of today’s rally was the strong performance from heavyweights within the banking sector. Bank Nifty index made a significant recovery, gaining over 1,300 points from the day’s low. This upsurge was largely powered by key players such as HDFC Bank, Axis Bank, IndusInd Bank, and SBI, each rising over 2%. The resilience of these banks not only lifted the Bank Nifty but also contributed to the broader market’s positive sentiment.

2 Sectoral Trends Bolster Market Sentiment

Sectoral indices played a critical role in boosting today’s performance. Sectors such as Nifty Metals, Nifty Private Bank, Nifty Auto, and Nifty Realty saw notable gains, with each index rising up to 2%. In contrast, Nifty FMCG and Nifty Media remained in negative territory, impacted by sector-specific selling pressure. This divergence highlights the selective buying pattern in sectors with higher growth prospects or recent positive developments, while certain defensive or growth sectors faced headwinds.

3 Crude Oil Prices Ease

The recent dip in US crude oil prices also provided relief to energy-sensitive sectors and industries. On Tuesday, US crude oil traded lower following its sharpest daily loss in two years, dropping over 6% or US$4.4, to reach $67.38 per barrel. This decline came after Israel’s anticipated retaliatory strikes against Iran on Friday spared Iran’s oil and nuclear infrastructure. The reduced geopolitical risk surrounding oil exports helped moderate energy prices, easing concerns of further supply disruptions. Consequently, the moderation in oil prices proved supportive for the broader market sentiment today.

Stock-Specific Highlights

Hatsun Agro Products Rallies 12%

Within the food and tobacco sector, Hatsun Agro Products rebounded sharply, surging over 12% a day after its stock dropped 4% due to a disappointing quarterly earnings report. By mid-afternoon, shares of Hatsun Agro Products were trading at Rs 1,156.40 on the NSE. This rally was partly driven by heightened trading volumes, with nearly eight lakh shares exchanging hands, well above the one-month daily average of 60,000 shares.

Despite a 17% YoY decline in net profit for Q2, falling from Rs 775.7 million to Rs 643.2 million, Hatsun Agro managed to post a modest 8% YoY increase in revenue from operations, reaching Rs 20.7 billion for Q2FY25. Importantly, the company’s EBITDA margin expanded by 15 basis points on a year-on-year basis, showcasing resilience amid challenging conditions.

Greenply Industries Rises 10%

Greenply Industries also saw a significant jump, with its shares climbing nearly 10%, marking its biggest intraday gain in eight months. The surge followed an increase in trading volumes, with 14 lakh shares changing hands on the BSE and NSE, compared to the one-month average of three lakh shares.

In its recent Q2FY25 earnings, Greenply Industries reported a 5.4% YoY increase in revenue and a notable 26.7% increase in net profit. Although the company’s profit faced a 46.7% sequential decline, largely due to rising operational expenses, its YoY growth signals long-term strength. The company’s SG&A expenses rose by 12.5% QoQ, affecting profitability in the short term.

Despite these short-term challenges, Greenply’s operational income maintained a solid year-on-year growth of 21.2%, underscoring a positive trajectory. The company’s Earnings Per Share (EPS) reached Rs 1.41 in Q2, up 25.9% YoY.

In conclusion, Today’s trading session marked a robust recovery for Indian stock markets, propelled by gains in major indices and support from specific sectors and heavyweight stocks. The rebound from intraday lows underscored the resilience of the Indian markets, with banking, metal, and auto stocks leading the charge. Easing oil prices further aided investor sentiment, providing a welcome relief amidst global market uncertainties.

While sectoral trends and individual stock performances added momentum, the overall optimism surrounding India’s economic prospects and corporate resilience likely sustained the positive trend. Moving forward, markets may continue to be influenced by global developments, sectoral shifts, and macroeconomic indicators, with a keen eye on evolving crude oil dynamics and the performance of key heavyweights.