Closing Bell, 02 January 2024: Despite the fall in Asian markets, the domestic stock markets registered a strong rally on the second day of the new year i.e. Thursday (January 2). Sensex and Nifty50 rose by about 2 percent due to strong buying in financial stocks. A strong rally in auto, IT and banking stocks also pulled the market upwards.

The 30-share BSE Sensex opened 150 points higher at 78,657.52 on Thursday (January 2). It had closed at 78,507.41 on Tuesday. In the end, the Sensex closed at 79,943.71 with a stormy rise of 1436.30 points or 1.83%.

Similarly, the National Stock Exchange (NSE) Nifty50 also opened with gains. In the end, it closed at 24,188.65 with a strong gain of 445.75 points or 1.88%.

Auto and IT index rose

The auto index rose 3.8%, the most among key sectors. Eicher Motors climbed 8.7% after it reported a jump in December vehicle sales. Royal Enfield motorcycle maker topped the Nifty 50.

The IT index rose 2.3%, led by Infosys' 4% gain and HCLTech's 3.2% gain. Capital markets firm CLSA said it expects software companies to raise their fiscal 2024-25 revenue growth estimates due to an improving outlook in the US.

Top Gainers

Out of the 30 companies of Sensex, the shares of 29 remained in the green and only one company Sun Pharma's share closed in decline. The share of Bajaj Finserv rose the most by 9%. Shares of Bajaj Finance, Maruti, Titan, Mahindra, Mahindra & Mahindra, Infosys, HCL Tech, Zomato, UltraTech Cement and Kotak Mahindra Bank were also major gainers.

Reasons for the surge in the stock market on Thursday (January 2)

1. There has been a huge correction in the domestic stock markets in the last few months. Due to this, select stocks of good quality have come at attractive prices. The stock market has got a boost due to buying in these stocks.

2. The sales figures of car companies for the month of December have been good. Its effect was seen in the form of a strong rally in auto stocks. With these figures, investors are hopeful that the December quarter results of companies will be strong.

3. Jefferies and Citi said asset quality pressures in the financial sector are expected to ease in 2025, while valuations across the sector remain attractive. Following this, financial stocks like Bajaj Finserv rallied strongly.

4. After the recent big fall or correction, the domestic markets have become cheaper. Due to this, good quality stocks are available at attractive prices, due to which strong buying is being seen in the market today. Let us tell you that NSE Nifty has fallen 8.5% from its record level and Sensex has fallen 7.36% from its all-time high.

G Chokkalingam, founder of Equinomis Research, said, “The sharp correction in the Indian equity market has given a strong boost to select good quality and low-priced stocks.”

What is the state of the global markets?

In Asian markets, Seoul, Shanghai and Hong Kong closed lower. Most European markets were trading in the red. US markets were closed on Wednesday due to New Year holidays.

How was the market movement on January 1?

Both benchmark Sensex and Nifty closed higher by around 0.4% on Wednesday (January 1) in the first trading of the year 2025. Rise in lead auto stocks pulled the market higher. Auto stocks rose due to rise in monthly sales of Maruti Suzuki and Mahindra & Mahindra.

Sensex and Nifty gave a return of 8.4% in 2024

Nifty and Sensex ended 2024 by giving investors a return of 8.4%. However, this is much lower than the return of around 20% in the year 2023. The market has been affected by the softness in the quarterly results of corporate companies and continuous foreign selling in the last quarter.

In the year 2024, the Sensex jumped 5,898.75 points or 8.16 percent and the Nifty rose 1,913.4 points or 8.80 percent. The BSE benchmark Sensex hit its record peak of 85,978.25 on September 27 this year and the NSE Nifty also hit its all-time high of 26,277.35 on the same day.

How will the market move in the new year?

According to experts, factors such as high yields in the US along with foreign investors' selling will continue in the new year as well. Monthly auto sales data and pre-quarter business updates to be released this week will be important for the Indian markets as they will determine the direction of the upcoming results season market.