Sensex Surges to Record Heights: Key Factors Behind the 1,500-Point Rally

On September 20, 2024, India's benchmark indices, the BSE Sensex and Nifty 50, witnessed a spectacular rally, with the Sensex surging by over 1,500 points to reach a record high of 84,694.5. This surge reflects the impact of a significant 50 basis points rate cut announced by the Federal Reserve on September 18, which has positively influenced investor sentiment.

The Sensex ended the day with gains of 1,359.51 points, or 1.63%, closing at 84,544.31. Similarly, the Nifty 50 finished the session up by 375.15 points, or 1.48%, at 25,790.95. This rally was predominantly driven by strong performances in various sectors, with 28 of the 30 Sensex stocks closing in the green. Leading the charge were companies like M&M, ICICI Bank, JSW Steel, L&T, and Bharti Airtel.

Among broader market indices, the Nifty MidCap index advanced by 1.4%, while the Nifty SmallCap index gained 0.98%. Notably, sectors such as Nifty Realty, Auto, Metal, and Banking all exhibited robust gains, reflecting the optimistic market sentiment fueled by external factors.

The rally in the Indian stock market is also supported by positive movements in global markets. Asian indices continued their upward trajectory, bolstered by the Fed's rate cut. The Nikkei rose by 1.68%, the ASX 200 increased by 0.05%, and the Hang Seng climbed by 0.88%. Additionally, Japan's core consumer prices showed a year-on-year increase of 2.8% in August, aligning with market expectations and further enhancing investor confidence.

In the United States, the S&P 500 reached a record high on September 19, supported by the Fed's decision and expectations for further rate cuts. The Dow Jones Industrial Average also made headlines by closing above 42,000 for the first time, marking a gain of 1.26%. Additionally, US unemployment claims dropped to their lowest level in four months, further contributing to the overall positive market sentiment.

Central banks around the world have adopted varied stances, with the Bank of England keeping its interest rate at 5%, diverging from the Fed's more aggressive cuts. Similarly, the Bank of Japan maintained its benchmark interest rate at around 0.25%, while China opted to keep its key lending rates steady.

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As the Indian stock market reacts positively to these global developments, investors remain hopeful for continued upward momentum. The strong performances from major stocks and sectors suggest that there may be more gains on the horizon as the market adjusts to the favourable conditions created by both domestic and international factors.