MUMBAI: A Significant Leap in the Stock Market

In an impressive turn of events, the Sensex experienced a substantial increase of nearly 2% on Thursday, momentarily surpassing the psychologically significant 80K mark before closing slightly lower at 79,944 - a gain of 1,436 points for the day. This rally was significantly aided by the absence of most foreign funds during the holiday season, a period that has seen foreign portfolio investors as major sellers over the last three months, leading to a downturn in leading indices.

NSE's Nifty Also Witnesses a Surge

On the NSE, the Nifty closed up by 446 points or 1.9% at 24,189 points. This rally added a little over Rs 6 lakh crore to investors' wealth, with BSE's market capitalisation now standing at Rs 458.8 lakh crore. The session started flat but saw the two leading indices pick up gains as the day progressed, closing near their intraday highs. Short covering in the later part of the session further fueled the rally, according to brokers and analysts.

Optimism in the New Year

"While markets failed to deliver a Christmas rally over the past few weeks, the new year has provided strong optimism in the first two days, with the Sensex touching the psychologically important 80K mark on the back of broad-based short covering," said Prashanth Tapse, senior VP (research) at Mehta Equities. Gains in banking, IT, auto, and metal stocks also triggered the rally, despite concerns in the currency market.

Looking Ahead

Brokers believe the gradual uptick in the market will continue in the short run. "Investors will closely track the pre-quarterly business updates to be released over the next few days for insights into the upcoming result season," said Siddhartha Khemka, head of research (wealth management) at Motilal Oswal Financial Services. Investors are also looking for global cues as foreign markets reopen after year-end holidays.