• The Indian stock market opened with a significant leap, buoyed by positive global cues.
• Market experts suggest a sustained rally is possible only with a revival in economic growth, expected in early 2025.
• Buying was observed in several sectors, with Tata Steel, Tech Mahindra, and Bajaj Finance among the top gainers.
• The market's performance is influenced by global cues, economic growth prospects, FII activities, and geopolitical events.

The Indian stock market, on Monday, opened with a significant leap of over 600 points, buoyed by a mix of positive global cues. The Sensex was trading at 78,665.83, marking a gain of 624.24 points or 0.80 per cent, while the Nifty was trading at 23,773.45, up by 185.95 points or 0.79 per cent, as of 9:29 am. The market trend remained largely positive, with 1,223 stocks trading in green on the National Stock Exchange (NSE), while 494 stocks were in the red.

Market experts have suggested that in the short term, the market may experience rebounds, which could be followed by renewed selling by Foreign Institutional Investors (FIIs). The experts further opined, "A sustained rally is possible only when we have indications of a growth revival in the economy. This is likely in early 2025." This statement underscores the importance of economic growth as a key driver for a sustained rally in the stock market.

In the banking sector, the Nifty Bank was up by 415.45 points or 0.82 per cent at 51,174.65. The Nifty Midcap 100 index was trading at 57,266.45, marking a gain of 359.70 points or 0.63 per cent. The Nifty Smallcap 100 index stood at 18,797.25, up by 82.95 points or 0.44 per cent.

Sectoral Performance and Top Gainers

On the sectoral front, buying was observed in metal, realty, commodities, IT, auto, PSU Bank, Financial service, FMCG, and Pharma sectors. In the Sensex pack, Tata Steel, Tech Mahindra, Bajaj Finance, HCL Tech, HDFC Bank, ICICI Bank and Bharti Airtel emerged as the top gainers. On the other hand, Zomato and NTPC were the top losers.

The global market also reflected a positive trend. The Dow Jones closed at 42,840.26 in the last trading session, marking a gain of 1.18 per cent. The S&P 500 added 1.09 per cent to close at 5,930.90, and the Nasdaq gained 1.03 per cent to close at 19,572.60.

Asian markets, including Hong Kong, China, Japan, Jakarta, Bangkok and Seoul, were also trading in green. However, the experts noted a change in the FII strategy, driven by the outperformance of the US (S&P 500 up 25 per cent year to date) and the relative underperformance of India (Nifty up 14.64 per cent year to date). They stated, The FII buying witnessed in early December completely reversed last week with FII selling of Rs 15826 crores.

Historical Market Trends and Influences

Looking back at historical events, the Indian stock market has experienced similar trends in the past. For instance, in October 2024, the market witnessed a downturn driven by escalating tensions in the Middle East, rising crude oil prices, regulatory changes in the F&O segment by SEBI, and outflows from FIIs. The situation worsened after Iran launched around 180 ballistic missiles at Israel, causing Brent crude prices to spike from $71 to $75 per barrel. This event had a significant impact on India, which imports 80 per cent of its oil.

In contrast, in September 2024, domestic benchmarks attempted to sustain new highs, driven by the US Fed's aggressive rate cut and the Chinese central bank's rate cut. These measures positively influenced global investor sentiment, resulting in gains for domestic metal stocks.

In June 2024, the market responded positively to political stability, with Narendra Modi expected to be sworn-in for a record-equalling third term. The support pledged by allies gave confidence to the market, driving up bank stocks. This period also saw a rise in world shares and a steadying of the dollar, with a European Central Bank policy meeting coming into focus.