• The Indian stock market saw a significant surge on November 22, 2024, with Sensex and Nifty rising over 2%.
• The rally was led by large-cap stocks, with financial stocks and strong US labour market data among the driving factors.
• Krishna Appala of Capitalmind Research advises investors to focus on sectors aligned with structural themes such as urbanisation, infrastructure, and consumption growth.

The Indian stock market witnessed a significant surge on November 22, 2024, with the Sensex and Nifty rising over 2 per cent. The Sensex closed at 79,117.11 after gaining 1,961.32 points, or 2.54 per cent, and the Nifty closed at 23,907.25 with a gain of 557.35 points, or 2.39 per cent. This marked the largest bull run since June 5, when the BSE Sensex rose 3.20 per cent, or 2,303.19 points, to 74,382.24, while the NSE Nifty was at 22,360.25, up 3.36 per cent or 735.85 points.

The rally was predominantly led by large-cap stocks, with financial stocks and strong US labour market data among the factors driving the surge. Blue-chip bank stocks also contributed to the jump in the benchmark indices. Market watchers noted that corrections in the broader market were creating opportunities to accumulate quality stocks with strong fundamentals and resilience to macroeconomic pressures.

Key Factors Driving the Rally

Krishna Appala of Capitalmind Research commented on the situation, stating, Despite global challenges, India's long-term growth story remains compelling. Investors should focus on sectors aligned with structural themes such as urbanisation, infrastructure, and consumption growth. Strategic portfolio adjustments, disciplined investing, and a long-term perspective are critical to navigating the current environment.

The IT sector, despite recent underperformance, is poised for recovery as global headwinds ease in the medium term. Vinod Nair, Head of Research at Geojit Financial Services, noted that positive momentum was also observed in global markets, due to a modest decline in Japan's October inflation and a 39 trillion yen stimulus package. Moderation in global and domestic political drama provided a relief to the domestic market, Nair added.

Market Performance and Future Outlook

Strong buying by domestic institutional investors (DIIs) and firm trends in US markets added to the recovery in domestic equities. From the 30-share Sensex pack, State Bank of India, ICICI Bank, IndusInd Bank, Tata Motors, Power Grid, Bajaj Finance, Bajaj Finserv and Tech Mahindra were the biggest gainers. However, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 5,320.68 crore on Thursday, while DIIs bought shares worth Rs 4,200.16 crore.

The rally in the Indian stock market is reminiscent of similar historical events. For instance, in 2017, the Sensex and Nifty hit record highs, driven by strong buying by DIIs and positive global cues. The rally was led by banking, IT and FMCG stocks. The market's performance was also boosted by positive economic data and expectations of robust corporate earnings.