• The Indian stock market surged on Monday, with the Sensex and Nifty both seeing significant gains.
• The market's optimism was driven by strong global cues and heavy buying in the realty and PSU bank sectors.
• Despite the positive market sentiment, experts caution that the short-term outlook may remain sideways due to a lack of new catalysts.
• The market's recovery comes after a five-day fall, with bargain hunting in blue-chip stocks adding to the optimism.

The Indian stock market experienced a significant surge on Monday, with the Sensex settling at 78,540.17, up by 498.58 points or 0.64 per cent, and the Nifty ending at 23,753.45, up by 165.95 points, or 0.70 per cent. This surge came after a decline of about 5 per cent over the previous five consecutive trading sessions. The market's optimism was bolstered by strong global cues and heavy buying in the realty and PSU bank sectors of Nifty.

The Nifty Bank ended at 51,317.60, up by 558.40 points, or 1.10 per cent. The Nifty Midcap 100 index closed at 57,092.9 after gaining 186.15 points, or 0.33 per cent. However, the Nifty Smallcap 100 index closed at 18,687.80 after dropping 26.50 points or 0.14 per cent. The market's positive sentiment was influenced by the lower-than-expected US personal consumption expenditure (PCE) print, which bolstered investor sentiment in interest rate-sensitive sectors.

Broad-based buying was observed, with the metals sector notably benefiting from the anticipated increase in steel import taxes. However, experts have cautioned that the short-term outlook is expected to remain sideways due to a lack of new catalysts and the impact of the festive season and holidays.

Market Performance and Key Players

On the Bombay Stock Exchange (BSE), 1,640 shares ended in green and 2,445 in red, whereas there was no change in 133 shares. On the sectoral front, all sectors ended in green except Auto, Media and Healthcare. In the Sensex pack, ITC, Tech Mahindra, HDFC Bank, IndusInd Bank, Titan, SBI, ICICI Bank, Adani Ports, Tata Steel and Bharti Airtel were the top gainers. Whereas, Zomato, Maruti, Nestle India, HCL Tech and Bajaj Finserv were the top losers.

Foreign institutional investors (FIIs) sold equities worth Rs 3,597.82 crore on December 20, while domestic institutional investors bought equities worth Rs 1,374.37 crore on the same day. In early trade, the Indian stock market jumped more than 600 points amid positive mixed global cues.

The rally was supported by broad-based buying, although market experts suggest that the short-term outlook may remain cautious. Among the Nifty companies, 32 stocks advanced and 18 declined. Leading the gainers, JSW Steel, ITC, Hindalco, Trent, and HDFC Bank saw significant increases in their stock prices, buoying overall market sentiment.

Global Influence and Future Outlook

However, Hero MotoCorp, Maruti, HCL Tech, HDFC Life, and Bajaj Finserv emerged as the top losers, with their stocks experiencing declines. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that while short-term rebounds could occur, these may be followed by renewed Foreign Institutional Investor (FII) selling. He said, "In the short run there will be market rebounds which may be followed by renewed FII selling. A sustained rally is possible only when we have indications of a growth revival in the economy. This is likely in early 2025."

The Indian market's recovery comes after a five-day fall, with bargain hunting in blue-chip stocks like ITC, HDFC Bank and Reliance Industries adding to the optimism in the equity market. Despite the positive market sentiment, the short-term outlook is expected to remain sideways due to a lack of new catalysts and the impact of the festive season and holidays, according to Vinod Nair, Head of Research, Geojit Financial Services.

In Asian markets, Seoul, Tokyo, and Hong Kong settled in the positive territory while Shanghai ended lower. In the past five sessions last week, the BSE benchmark tanked 4,091.53 points or 4.98 per cent, and the Nifty slumped 1,180.8 points or 4.76 per cent. Foreign institutional investors (FIIs) offloaded equities worth Rs 3,597.82 crore on Friday, according to exchange data. Global oil benchmark Brent crude climbed 0.44 per cent to USD 73.26 a barrel.