Sensex Soars 591 Points at Close | Nifty Tops 25,100 | 5 Factors Driving the Rise of Indian Stock Markets

On the first trading day of the week, Indian benchmark indices started flat but showed resilience throughout the session. By the time the markets closed, they had made significant gains, signaling a strong day for investors. The BSE Sensex and NSE Nifty50, the two key equity indices, posted solid performances, largely driven by robust buying activity across key sectors like banking, IT, and financial services.

Market Close: A Strong Finish

At the end of the day, the BSE Sensex surged by 591 points, closing 0.7% higher. Similarly, the NSE Nifty50 rose by 163 points, marking a 0.7% increase. Among the biggest winners for the day were major players like Wipro, Tech Mahindra, and HDFC Bank, while ONGC, Tata Steel, and Adani Enterprises found themselves on the losing end.

Meanwhile, the GIFT Nifty was trading at 25,208, a gain of 135 points. Mid-cap and small-cap stocks also saw positive movement, with the BSE MidCap index finishing 0.3% higher and the BSE SmallCap index posting marginal gains.

With the exception of the metal and oil & gas sectors, most other sectoral indices traded positively, with particularly strong performances in real estate, IT, and banking. Some companies, such as Coforge, Trent, and Dixon Technologies, even reached their 52-week highs during the day.

Key Factors Driving Market Momentum

Several factors were responsible for this upward movement, and understanding them provides deeper insight into the broader market trends.

1. Positive Global Market Cues

Global market sentiment was optimistic, particularly in Asia, where shares posted gains. China's stock markets rallied, with the Shanghai Composite index climbing by 2.1% and the Shenzhen market rising by 3%. The positive sentiment in China came after its finance minister hinted at the need for more stimulus to revitalize the slowing economy. This optimism extended to other Asian markets, providing a solid foundation for the Indian markets to build upon.

Meanwhile, in the US, futures were relatively flat, and oil prices declined, helping to create a positive atmosphere for equities across the board.

2. IT Sector Leads the Rally

The IT sector was one of the major drivers of the day's gains. The Nifty IT index surged by 1.41% to close at 42,934.40. Over the past two sessions, the index has risen by 2%, signaling strong investor interest in technology companies.

Key contributors to this rally included Wipro, which jumped by 3.99%, Mphasis, which gained 2.92%, and Tech Mahindra, up by 2.62%. Other major IT companies like Infosys, Persistent Systems, and LTIMindtree also saw positive movement, as did HCL Technologies and Coforge.

The strength in IT stocks can be attributed to a combination of factors, including a favorable global business environment and positive earnings expectations for the sector.

3. Government Bond Yields on the Rise

Another key factor that played into the market's dynamics was the movement in government bond yields. The yield on India's 10-year benchmark government paper increased by 1.49% to 6.889%, up from the previous close of 6.788%. Rising bond yields often reflect inflation concerns or expectations of tighter monetary policy, but in this case, it didn’t deter investors from equities.

4. Rupee Strengthens Against the Dollar

The foreign exchange market saw the Indian rupee edge higher against the US dollar. At the time of writing, the rupee was trading at 84.0725 per dollar, up slightly from its previous close of 84.1050. A stronger rupee is generally seen as positive for markets, as it reduces the cost of imports and makes Indian assets more attractive to foreign investors.

In addition, the US Dollar Index (DXY), which measures the dollar's strength against a basket of currencies, was up 0.12%, trading at 103.02. Despite the slight rise in the dollar, the rupee managed to gain ground, further boosting market sentiment.

5. Declining Oil Prices

In the commodities market, oil prices were on the decline, with Brent crude for November 2024 settlement falling by $1.33, or 1.68%, to $77.71 per barrel. Falling oil prices are typically good news for India, as the country is a major importer of crude oil. Lower oil prices ease inflationary pressures and reduce the fiscal burden, which can be favorable for the overall economy and the stock market.

Premier Energies Gains on New Orders

In the corporate sector, Premier Energies made headlines as its shares jumped by 10% on October 14th. The company’s subsidiaries, Premier Energies International Private Ltd and Premier Energies Photovoltaic Private Ltd, secured multiple orders worth Rs 7.7 billion. These orders include Rs 6.3 billion for solar modules and Rs 1.3 billion for solar cells, with supply set to commence in July 2025.

Premier Energies, which manufactures integrated solar cells and panels, has been expanding its reach in both domestic and international markets. The orders come from a mix of eight domestic customers and one foreign client, signaling growing demand for the company’s products.

Additionally, on October 8th, Premier Energies announced that it had signed a Module Supply Agreement with BN Hybrid Power-1 Private Limited, a special purpose vehicle (SPV) of BrightNight India. The agreement involves the supply of 173.35 MWp of solar modules for a renewable energy project in Barmer, Rajasthan, starting in July 2025.

Hathway Cable Reports Strong Earnings

Hathway Cable & Datacom, a leading cable television and broadband services provider, saw its stock rise by over 3% following the release of its Q2 earnings report. The company posted a 28.4% year-on-year increase in net profit, reaching Rs 258 million. Revenue from operations rose by 6% to Rs 5.1 billion during the quarter.

Hathway, one of India's largest multiple-system operators, has been expanding its high-speed broadband services, which contributed to its strong performance. The company's EBITDA grew by 4.4% year-on-year, although its EBITDA margin narrowed slightly to 16.8%, down from 17.1% a year earlier.

In conclusion, The strong performance of the Indian stock market on the first trading day of the week can be attributed to a mix of domestic and global factors. Positive cues from Asian markets, a rally in IT stocks, rising bond yields, a stronger rupee, and falling oil prices all played a role in boosting investor sentiment. As these trends continue to evolve, it will be important for investors to keep an eye on both global market developments and sector-specific news that could drive future market movements.