Sensex gains over 650 points: What's behind today's rally?
What's the story
The Indian stock market made a comeback on Thursday, with the Sensex and Nifty indices witnessing significant gains. The rally ended a seven-day losing streak for Nifty and a four-session losing streak for Sensex. The surge was largely driven by falling US bond yields, short-covering, and positive global cues. Major companies such as Infosys and TCS played a crucial role in this market upturn.
Market overview
Nifty 50 gained over 160 points to rise to 24,239
The Sensex jumped 656 points to trade at 77,566 while the Nifty 50 gained over 160 points to rise to 24,239.
The broader markets also followed suit with Nifty Midcap 100 and Nifty Smallcap 100 rebounding nearly 1% each.
Top gainers on Sensex included Infosys, IndiGo, TCS, Bajaj Finance, and Tech Mahindra shares which rose by up to 2% each.
Financial indicators
US Treasury plans to double buyback sizes for long-duration debt
The US Treasury announced plans to double buyback sizes for long-duration debt in a bid to tame rising yields.
This resulted in a decline in US bond yields with the benchmark 10-year note yield falling to 4.637% and the 30-year bond yield dropping to 5.181%.
Meanwhile, the rupee appreciated by 17 paise against the US dollar as it rose to 95.56 per dollar in early trade amid these developments.
Investor activity
Foreign investors remained net buyers on Dalal Street
The market's rise also comes after a long streak of losses for Indian benchmark indices. The Nifty fell over 2% in seven sessions, its longest losing streak in 11 months.
Foreign investors remained net buyers on Dalal Street, net purchasing shares worth ₹408 crore on Wednesday.
This came after foreign investors had net bought shares worth ₹2,573 crore in the previous session despite muted markets.
International influence
Global peers gain amid positive cues
The Indian stock market also took cues from its global counterparts, which were trading in the green.
South Korea's Kospi surged over 6% while Japan's Nikkei and Hong Kong's Hang Seng gained over 1% each.
The overall market breadth turned sharply positive with NSE witnessing 1,965 advances against 518 declines while 110 stocks remained unchanged.