Sensex surges 1022 points, nears all-time high

MUMBAI: A strong closing in the US market on Tuesday night, slide in crude oil prices and expectations of a rate cut in the US and in India combined to lift investor sentiment on Dalal Street that in turn led to a 1,022-point rally in sensex, which closed at 85,610 points on Wednesday.At close, the index was less than half-a-percentage-point from its all-time high of 85,978 points, recorded 14 months ago. The day’s gain in the sensex was the biggest single-session rise in about six-and-a-half months. Nifty closed 321 points up at 26,205 points, just 72 points away from its all-time high of 26,277 points recorded in Sept 2024.According to Vinod Nair of Geojit Investments, the day’s rally was influenced by a ‘Santa Claus rally’ in global markets, a term usually reserved for a market upswing ahead of Christmas. The uptrend in the sensex and Nifty “was fuelled by robust retail and domestic institutional investor inflows, while foreign institutional investor flows remained modest.”In global markets, investor sentiment improved with rising expectations of a cut in interest rates in the US in Dec, along with softer US yields and a weaker dollar, Nair wrote in a note to investors. “Additionally, a 1% decline in crude oil prices helped to ease inflationary concerns.” On the domestic policy front, the RBI is widely anticipated to cut interest rates by 25 basis points (100 basis points = 1 percentage point) in Dec, supported by moderating inflation and a dovish stance, Nair said.The talks of a truce between Russia and Ukraine also helped investor sentiment globally, market players said.At the close of Wednesday’s trading, investors’ wealth jumped by Rs 5.5 lakh crore with BSE’s market capitalisation now at Rs 474.9 lakh crore. At the current level, BSE’s market cap is about Rs 3 lakh crore away from its all-time high mark of Rs 477.9 lakh crore, recorded on Sept 27, 2024.In Wednesday’s session, of the 30 sensex constituents, 28 closed with gains. The only two exceptions were Bharti Airtel and Asian Paints.In the broader market, however, the advance-decline ratio was less skewed towards the gainers with 2,721 winners to 1,453 laggards, BSE data showed.