In a strong afternoon session on November 29, 2024, the Sensex surged by 721.31 points, or 0.91 percent, closing at 79,765.05, while the Nifty rose by 208.50 points, or 0.87 percent, to 24,122.70. The market rally was primarily driven by gains in auto, pharma, energy, and infra stocks, which lifted sentiment following the previous day’s steep market correction.

While the Nifty and Sensex recorded substantial gains, the PSU Bank index slipped by more than 1 percent, driven by losses in major public sector banks such as SBI, Bank of Baroda, and Canara Bank. The Nifty Bank index also edged lower by 0.2 percent, dragged by declines in HDFC Bank and SBI.

RIL and Pharma Stocks Boost Market Sentiment

The market was buoyed by a sharp rally in Reliance Industries (RIL), which rose by almost 2 percent after the company announced its subsidiary, Reliance Finance and Investments USA LLC, entered into a stock purchase agreement with Wavetech Helium, subscribing to a 21 percent stake in the helium gas exploration and production company. This development helped RIL garner positive attention, with Morgan Stanley issuing an 'overweight' call on the stock, further boosting investor confidence.

Bharti Airtel, a telecom major, saw a notable 4 percent increase, topping the Nifty after receiving a 'buy' call from ICICI Securities. The firm expects Bharti Airtel to post a 14.8 percent EBITDA CAGR over the next two years, suggesting strong growth potential. ICICI Securities set a price target indicating an 18 percent upside from the stock's previous close.

In addition to telecom, pharma stocks also performed strongly. Divi’s Labs surged by nearly 4 percent, after Citi reiterated its buy recommendation on the stock, highlighting the company’s expanding pipeline in the contrast media business. Citi set a price target of ₹6,850, implying a 15 percent upside from the previous close, reinforcing investor optimism in the pharma sector.

PSU Banks Drag Index Lower

Despite the Sensex and Nifty surging, the PSU Bank index faced downward pressure, tumbling over 1 percent. SBI, Bank of Baroda, and Canara Bank were the primary contributors to the decline in the index, with these stocks witnessing substantial losses.

The broader Nifty Bank index also faced headwinds, declining by 0.2 percent, led by drops in HDFC Bank and SBI. This downturn in the banking sector came as investors remained cautious about high inflation, as well as concerns over FII selling in the previous session. Investors are also awaiting further clues from upcoming economic data to gauge the market's next direction.

Sector Performance: Nifty Energy, Infra, IT, and Auto Shine

On a more positive note, the Nifty Energy, Infra, IT, and Auto indices rose between 1 to 2.4 percent, contributing to the overall market surge. These sectors were lifted by a combination of corporate earnings, positive investor sentiment, and easing concerns over short-term policy tightening.

The pharma sector also saw a strong performance, driven by gains in Sun Pharma, Dr. Reddy's Laboratories, and Divi’s Labs, which helped to lift the Nifty Pharma index. Other sectors, including IT and FMCG, also posted modest gains, advancing by 0.6 percent.

Broader Market Performance and Mid-Caps Outperform

The mid-cap and small-cap indices outperformed the benchmark indices, gaining 0.1 percent each. These indices have surged by 21 percent since the start of the year, significantly outperforming the Nifty, which has risen just over 11 percent in the same period. Investors are optimistic about mid- and small-cap stocks, as they look for renewed buying interest following a healthy correction in the broader market. These stocks could outperform in the coming weeks, especially if the Indian economy maintains its growth momentum.

Market Outlook: Investors Stay Cautious Amid Key Data Releases

Investors remain cautious as key data releases are expected in the coming days, including India’s Q2 GDP data, China’s manufacturing PMI, and Eurozone CPI. While the market showed resilience today, concerns over geopolitical tensions and global inflationary pressures could weigh on sentiment in the near term.

Experts suggest that immediate support for the Nifty lies at 23,800 and 23,680, with potential reversal points if these levels hold. On the upside, 24,350 is the immediate resistance level, and a sustained move above this level could propel the index toward 24,800 and even 25,000, unlocking significant upside potential. Mandar Bhojane from Choice Broking pointed out that the Bank Nifty faces some bearish pressure, with 52,000 being a critical level. A sustained drop below this could signal further weakness, with potential support levels at 51,200 and 51,000.

Summary of Market Performance

• Sensex surged 721 points to 79,765, driven by gains in Reliance Industries, Bharti Airtel, and pharma stocks.
• Nifty rose by 208 points to 24,122, with significant gains in energy, infra, auto, and pharma sectors.
• The PSU Bank index tumbled over 1 percent, led by losses in SBI, Bank of Baroda, and Canara Bank.
• The broader market, represented by mid-cap and small-cap stocks, outperformed the benchmarks, gaining 0.1 percent.
• Investors are waiting for key data releases, including Q2 GDP and China’s PMI, to guide market direction.