Sensex nears 80,000, Nifty tops 24,000 as Auto, IT stocks drive rally
Markets staged a robust comeback in the first trading session of 2024, with the benchmark Sensex surging 1,436.30 points (1.83 per cent) to close at 79,943.71, nearly touching the 80,000 mark. The Nifty50 registered similar gains, climbing 445.75 points (1.88 per cent) to end at 24,188.65.
The rally was broad-based, with auto stocks leading the charge after strong December sales data from major manufacturers. Eicher Motors emerged as the top gainer, soaring 8.55 per cent following a 25 per cent year-on-year growth in December sales and a remarkable 90 per cent surge in exports. Other significant gainers included Bajaj Finserv (7.84 per cent), Bajaj Finance (6.32 per cent), Maruti Suzuki (5.61 per cent), and Shriram Finance (4.53 per cent). Only two stocks in the Nifty declined – Sun Pharma (-0.84 per cent) and Britannia Industries (-0.20 per cent).
“The auto sector led the way, showing the strongest momentum due to robust December sales that defied the usual subdued demand. Banking and IT stocks also performed well, as the economy bottomed in Q2,” said Vinod Nair, Head of Research at Geojit Financial Services.
Market breadth remained positive, with 2,395 stocks advancing against 1,574 declining on the BSE. Notably, 173 stocks reached their 52-week highs, while only 25 touched their 52-week lows. Seven stocks hit the upper circuit, and three reached the lower circuit.
The rally was particularly significant in sectoral indices, with the Auto index surging 3.75 per cent and IT gaining 2 per cent. The Nifty Bank index rose by 544.95 points (1.07 per cent) to 51,605.55, while Nifty Financial Services added 386.75 points (1.64 per cent) to close at 24,006.70.
“While markets failed to deliver a Christmas rally over the past few weeks, the New Year has provided strong optimism in the first two days with Sensex touching the psychological 80k mark on the back of broad-based short covering,” noted Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
According to Bajaj Broking Research Team, “A 7.3 per cent year-on-year rise in December GST collections to ₹1.77 lakh crore signaled a recovery in consumption activity, further lifting market sentiment. The improving economic momentum, coupled with robust auto numbers and business update from major players like Maruti Suzuki, Mahindra & Mahindra, and CSB Bank, has bolstered expectations for strong Q3 earnings, driving today’s market optimism.”
Looking ahead, market participants are focusing on the upcoming earnings season starting next week, particularly from IT companies. Additionally, the market is watching ITC Limited’s planned demerger of its hotel business into ITC Hotels Limited, scheduled for January 6, 2025.
From a technical perspective, Shrikant Chouhan, Head of Equity Research at Kotak Securities, suggested that “the market successfully cleared the 200-day SMA resistance mark, and after this breakout, positive momentum intensified. The current market texture is bullish, with the range of 24300/80300 to 24,375/80500 serving as crucial resistance areas for short-term traders.”
However, analysts caution about potential headwinds. “Any further uptick in US bond yields could weigh on domestic equities and fuel foreign fund outflows,” warned Prashanth Tapse, highlighting concerns about rising crude oil prices and subdued growth impacting the currency market.
The India VIX, which measures market volatility, showed a decline, indicating improved investor confidence as markets entered the new year on a positive note.