Reasons Behind the Benchmark Indices' Historic Rally
Indian benchmark indices continued their record-breaking rally for the second consecutive day. On Tuesday, Sensex jumped 431.02 points, or 0.63 percent, to close at 69,296.14, while Nifty rallied 168.30 points, or 0.81 percent, to close at 20855.10. Nifty and Sensex recorded fresh heights of 20
864.05 and 69,381.31 intraday.
The investors in BSE-listed stocks became richer by adding 3.06 lakh crore of net worth as the market capitalization of the BSE-listed companies jumbed to Rs. 346.51 lakh crore.
Top gainers on the Nifty were Adani Enterprises, Adani Ports, Power Grid Corporation, NTPC, and SBI, while losers were LTIMindtree, HCL Technologies, Divis Labs, HUL, and Bajaj Auto.
On the sectoral front, the power index was up 6 percent, the oil & gas index was up nearly 2 percent, and the bank index was up 1 percent, while the information technology and real estate indices were down 0.5 percent each.
BSE midcap and smallcap indices ended with marginal gains.
The Nifty Bank index also added over 1 percent to hit a new record high at 47,230.55 intraday. The Indian equity market witnessed a historic rally in the last six days, despite weak sentiments in global markets. Experts attribute the rally to the Narendra Modi government”s triumph in the Madhya Pradesh, Chhattisgarh, and Rajasthan elections. As the assembly elections are considered the precursor to the general election, the win gave a clear edge to the Narendra Modi government over Congress in the 2024 general election.
Moreover, Adani Group stock played a crucial role in today”s surge. Adani stocks zoom up to 20% after a report says a US agency finds Hindenburg”s allegations “irrelevant”. International Development Finance Corp. (DFC) conducted a due diligence investigation before extending the conglomerate a $553 million loan for a container terminal in Sri Lanka, a Bloomberg report said.
Following the development, flagship Adani Enterprises Ltd. surged more than 10 percent to Rs 2,784.30 on the National Stock Exchange. Its market capitalization topped the Rs 3 lakh crore mark once again. The stock has surged 173 percent from its 52-week low. As the Adani Group companies have significant weight on the index, it helped the Nifty50 rise to a record high.
Adani Green Energy gained 17 percent after securing an additional $1.36 billion in funding via a senior debt facility.
Shares of Adani Ports and Special Economic Zone Ltd. (ASPEZ) surged 15 percent and 17 percent, respectively, to hit new 52-week highs.
Adani Energy Solutions also surged 20 percent to Rs 1084.4 on the NSE. Shares of Adani Total Gas gained 20 percent to hit an intraday high of Rs 878.7 on the NSE, with a total valuation of around Rs 96,600 crore. Adani Power stock gained about 15 percent to 535.95 on the NSE.
Adani Wilmar also jumped over 10 percent to Rs. 380.85. Ambuja Cements gained 7 percent as it completed the acquisition of Sanghi Industries (SIL) at an enterprise value of Rs 5,185 crore. With the acquisition, funded entirely through internal accruals, Ambuja Cement now holds a controlling stake of 54.51 percent in SIL.
Among other Adani Group companies, shares of ACC jumped 8 percent and NDTV 18 percent.
