Did Sensex and Nifty Just Achieve Their Best Single-Day Rally in 4 Years?

New Delhi, May 12 (NationPress) The announcement of a ceasefire understanding between India and Pakistan sparked excitement among investors, who saw their wealth soar by over Rs 16 lakh crore in just one day, as the Sensex and Nifty experienced a remarkable rally of nearly 4 percent, the largest since February 2021.

The Indian stock markets registered their most impressive single-day gains in four years, fueled by positive domestic and global signals that uplifted market optimism.

By the end of trading, the Sensex surged by 2,975.43 points, equating to 3.74 percent, closing at 82,429.90, while the Nifty rose by 916.70 points, or 3.82 percent, ending at 24,924.70.

This represented the second-largest percentage increase for both indices over the past four years, with only a larger rally noted on February 1, 2021, when the indices jumped by over 4.7 percent.

The surge was propelled by a series of positive developments, including the ceasefire understanding between India and Pakistan, advancements in US-China trade discussions, and reports of peace talks between Russia and Ukraine.

These factors contributed to a reduction in geopolitical tensions, enhancing global risk tolerance and boosting investor confidence.

All sectoral indices concluded in the green, indicating a widespread recovery across various sectors.

Even the Nifty Pharma index, which had opened down by 2 percent following US President Donald Trump's remarks about drastically cutting drug prices, managed to recover and close up 0.15 percent as market concerns subsided.

Leading the charge were the Nifty IT and Nifty Realty indices, which experienced gains of 6 percent and 7 percent respectively. Midcap and smallcap stocks also participated in the rally, outperforming the broader market with respective gains of 4.1 percent.

The overall market capitalization of all companies listed on the BSE increased to Rs 432.47 lakh crore, rising from Rs 416.52 lakh crore in the previous session, marking a remarkable gain of Rs 16 lakh crore in just one day.

Analysts noted that the markets kicked off the week on a robust note, driven by favorable global and domestic factors.

“All major sectors played a role in this rally, with IT, Realty, and Metals leading the charge. The broader markets mirrored this strength, each advancing close to 4 percent,” stated Ajit Mishra, SVP, Research, Religare Broking Ltd.

The reduction of geopolitical tensions and progress in global trade discussions brought significant relief to the markets, as seen in a significant decline in the India VIX volatility index.

Technically, the significant rise in the Nifty indicates a continuation of the upward trend following a three-week consolidation period. After surpassing the previous swing high of approximately 24,857, the index is now positioned to approach the 25,200 level, while the 24,400–24,600 range is anticipated to provide solid support in case of any declines, according to Mishra.