SENSEX surges over 600 points, NIFTY50 firm above 24,750; Here are key factors behind Friday’s surge

After a subdued start, the Indian equity benchmarks gained traction on Friday, May 23, led by index heavyweight ITC after it reported strong March quarter earnings post market hours on Thursday. The SENSEX rose as much as 605 points and NIFTY50 index was trading firmly above its important psychological level of 24,750 amid positive cues from other Asian markets.

ITC alone added nearly 10% towards gain in the SENSEX, data from BSE showed.

As of 9:47 am, the SENSEX was up 539 points or 0.66% at 81,491 and NIFTY50 index advanced 185 points or 0.75% to 24,794.

Boost from Asian peers

Most of the Asian markets were trading higher on Friday as US government bonds found buyers after US President Donald Trump's tax bill narrowly passed the lower house, although debt worries still lingered, news agency Reuters reported.

Japan's Nikkei rose 0.6%, Hong Kong's Hang Seng advanced 0.7%, South Korea's KOSPI rose 0.11% and China's Shanghai Composite gained 0.1%.

Overnight, US stocks largely ended on a flat note.

Fall in crude prices

Sentiment for Indian equities got a boost from fall in crude oil prices in the international markets. Oil prices dropped on expectations that the OPEC+ group of oil exporters may decide on another increase in output at their next meeting.

Brent Crude in international markets declined 0.5%.

Lower crude oil augurs well for Indian economy as India imports most of its crude oil requirements, analysts said.

Broad-based buying interest

Buying was visible across board as most of the sector gauges compiled by the National Stock Exchange were trading higher led by the NIFTY IT index's 1% gain. NIFTY Oil & Gas, FMCG, Realty, Metal, PSU Bank and Media indices also rose between 0.4-1%.

On the flipside, NIFTY Pharma index was trading 0.8% lower on the back of selling pressure in Sun Pharma after its March quarter earnings failed to enthuse investors.

Broader markets were also trading higher as NIFTY Midcap 100 index rose 0.5% and NIFTY Smallcap 100 index climbed 0.44%.

NIFTY50 gainers and losers

ITC shares rose as much as 1.85% to hit an intraday high of ₹434 on the NSE after it reported a net profit of ₹19,561.57 crore in the January-March quarter, marking an increase of 247% from ₹5,638 crore in the same period last year. The sharp surge in profit in the March quarter came on the back of an exceptional gain of ₹15,179.43 crore on the demerger of the hotels business.

Eternal was top gainer in the NIFTY50 basket of shares, the stock rose 2.57% to ₹235. Grasim, Infosys, Trent, Tata Consumer Products and HCL Tech were also among the gainers.

On the other hand, Sun Pharma was top loser in the NIFTY50 index. The stock fell 3.5% to ₹1,660 after it reported consolidated net profit of ₹2,654.58 crore in the fourth quarter ended on March 31, 2024.

The company had posted a consolidated net profit of ₹1,984.47 crore in the fourth quarter of the previous fiscal, Sun Pharmaceutical Industries said in a regulatory filing.

Hindalco and ICICI Bank were also among the notable losers.

The overall market breadth was extremely positive as 1,947 shares were advancing while 973 were declining on the BSE.