Biggest Rally in 5 Months: Sensex Soars Nearly 2,000 Points as Markets Shake Off Adani Concerns
After weeks of sluggish trading, the stock market roared back to life with its biggest single-day rally in five months. The Sensex skyrocketed by nearly 2,000 points, while the Nifty climbed over 550 points, marking a sharp turnaround driven by renewed optimism across the board. Investors shrugged off lingering fears around the Adani bribery allegations and instead focused on positive cues, including the possibility of a BJP-led alliance win in the upcoming Maharashtra elections.
Broad-Based Buying Powers the Market
The market’s rebound came after seven weeks of correction, during which concerns around global factors like the Russia-Ukraine conflict and sustained foreign investor selling weighed heavily. On November 21, fears over Gautam Adani’s bribery case dominated sentiment, dragging public sector lenders and other exposed stocks lower. However, clarity on the limited risk to PSU banks eased the jitters, leading to a strong recovery.
At the close, the Sensex surged 1,961 points to settle at 79,117.11, while the Nifty jumped 557 points to 23,907.30. Market breadth was strong, with 2,333 stocks advancing, compared to 1,430 decliners, and 113 unchanged.
Sector-Wide Rally with Key Winners
All 13 sectoral indices posted gains, led by PSU Bank, Realty, Infrastructure, and IT, which gained up to 3%. Public sector lenders, which had tumbled on fears of Adani exposure, rebounded as clarity emerged. For instance, State Bank of India (SBI) rose over 4% after Jefferies reiterated its “buy” rating, with a potential 29% upside to a target of Rs. 1,030.
In IT, the sector extended its impressive rally, gaining nearly 3% during the day and adding to a remarkable 28% year-to-date surge. Strong US labor market data provided further support, with weekly jobless claims dropping to a seven-month low. This signals potential resilience in US job growth, despite challenges like hurricanes and strikes.
Another standout was Reliance Industries, which jumped 3% following bullish commentary from Morgan Stanley and JPMorgan. These brokerages highlighted improving refining margins as a key positive, despite some lingering concerns about slower retail growth.
Fintech major Paytm also caught attention, rising nearly 6% for its fifth straight session. The narrative for the company appears to be shifting from survival to growth, with analysts at Bernstein recently reiterating a positive outlook.
Maharashtra Elections: The Key Trigger?
Investors seemed to price in a BJP-led “Mahayuti” victory in the Maharashtra Assembly elections, as exit polls suggested a strong majority for the ruling alliance. Polls predict 151 seats for the BJP-led coalition against 129 for the opposition Maha Vikas Aghadi. Final results for all 288 seats will be announced on November 23, with traders viewing the outcome as a potential driver for short-term sentiment.
Experts Advise Caution Amid Optimism
While the rally sparked excitement, analysts warned against overconfidence. Ajit Mishra of Religare Broking highlighted that this is still a single-day recovery, not an indication of a sustained trend. The market has breached its 200-day moving average (DMA), and further upside depends on factors like foreign investor flows and global stability.
Technical expert Sameet Chavan of Angel One advised investors to watch key levels. “Nifty faces resistance around 23,800-24,000, and pullbacks may offer opportunities to trim long positions. On the downside, support lies between 23,100-23,200,” he said, urging a disciplined risk management approach.
Adani Group Rebounds; Mid and Small Caps Shine
Adani Group stocks, which saw heavy losses earlier, rebounded sharply, gaining up to 3-4% as fears abated. The broader markets followed suit, with mid-cap and small-cap indices rising by 1.3% and 0.9%, respectively. However, Geojit’s Gaurang Shah advised caution, especially in the volatile microcap space, recommending a stock-specific approach.
What Lies Ahead?
While today’s rally has reignited bullish sentiment, the market’s trajectory remains uncertain amid geopolitical tensions and persistent foreign institutional investor (FII) selling. As traders wait for Maharashtra’s election results and track other triggers like global data and earnings, the focus is on staying nimble.
In conclusion: Bulls are back, but sustainability is key. Keep an eye on key levels, manage risks wisely, and don’t get carried away by a single-day surge. Markets, like life, reward those who stay prepared for the unexpected.
