Stock Market Updates: Sensex and Nifty Are Up? Why the Changes and Is It Long-Term?

Sensex and Nifty Surge: Reasons Behind the Rise and Future Outlook

Written by: Supriya Kadu

Edited by: Pinky Deshmukh

Last Updated: January 14, 2025

Summary: Even after the gains the stock market is still under pressure due to Q3 earnings and persistent selling by foreign institutional investors.

After falling sharply to 7-month lows the day before, benchmark stock market indices rose on Tuesday. Early trading saw a 400-point increase in the S&P BSE Sensex and a comparable recovery in the NSE Niffty50.

The stock market is still under pressure despite today's recovery for many reasons, most notably the effect of Q3 earnings and persistent selling by international institutional investors.

Even while volatility has decreased today, it is still quite strong, as evidenced by the erratic swings the entire market is experiencing.

Reasons For Today’s Gains

4-Month Low Retail Inflation

One of the reasons for today's market rise is that retail inflation decreased to a four-month low in December. The majority of sectors, including FMCG, are expected to benefit from a decline in retail inflation.

Even while the overall Q3 impact has caused FMCG shares to decline today, the lower inflation is probably going to provide them a boost soon.

Gain In Heavyweights Sectors

Except for IT, which saw a nearly 2% decline, all Nifty sectoral indices increased. The venerable Nifty Bank and Nifty Financial Services indices also saw gains, which fueled Dalal Street's rebound today.

After dropping in the previous session, Nifty Metal too saw a significant increase. With Adani Enterprises rising more than 5% and Hindustan Zinc gaining almost 4%, the index was up 2.48%.

Big Gains In Stocks

Adani Enterprises, Bajaj Finance, SBI, and HDFC Bank are major stocks that earned big in early trade due to high trade volume. This gave a boost to the stock market today despite the IT sector failing following a steep decline in HCLTech's share price after its Q3 earnings.

Will the gains continue or is it just a fluke?

Analysts predict that the stock market will continue to be under pressure soon due to ongoing FII selling, a stronger US currency, and waning expectations of rate reduction, even though the Sensex and Nifty recovered today.

Except for a few bright spots like TCS, which reported better-than-expected numbers, the market has not been particularly cheered by the Q3 earnings season thus far.