The Indian stock markets experienced a robust comeback on December 5, with Sensex and Nifty both closing sharply higher. The rally was driven by strong foreign institutional investor (FII) inflows, which were boosted by Jerome Powell's comments on the resilience of the US economy. Powell, in his recent remarks, stated that the US economy is performing stronger than expected, which sparked optimism in global markets, including India. At the close of trading, the Sensex surged by 809.53 points or 1.00 percent, reaching a total of 81,765.86, while the Nifty advanced by 240.95 points or 0.98 percent, closing at 24,708.40.

This strong rally was accompanied by a positive market breadth, with 2,050 shares advancing, 1,758 declining, and 113 ending unchanged. The positive sentiment was also fueled by the upcoming Reserve Bank of India (RBI) monetary policy decision, scheduled for December 6, which is expected to provide further clarity on India's economic direction.

Key Stock Movements:

Central Depository Services (CDSL) emerged as one of the top performers of the day, with its shares rising 8 percent to close at Rs 1,854, hitting an all-time high of Rs 1,865. Over two crore shares of CDSL were exchanged, which was significantly higher than the usual volume of 42 lakh shares. This strong surge comes as the stock has more than doubled this year, with a 100 percent increase, outpacing the Nifty 50's gain of just 12 percent. CDSL, which is responsible for maintaining electronic records of financial securities, has seen significant growth as investor activity remains high in the Indian markets.

The Nifty IT index, which is heavily influenced by companies deriving a significant portion of their revenue from the US, also hit an all-time high, closing 2 percent higher. The rise came after Powell’s remarks about the strength of the US economy, which spurred optimism in Indian IT stocks, including heavyweights like TCS, Infosys, and HCL Tech. The expectation of further interest rate cuts by the US Federal Reserve, which is likely to benefit Indian IT firms, helped push this index to new highs.

Shares of food aggregators such as Zomato and Swiggy also surged. Zomato, which saw its stock rise by nearly 5 percent, was buoyed by positive brokerage views. CLSA, a renowned international brokerage, maintained an 'outperform' rating on Zomato, raising its target price to Rs 370 per share. The brokerage believes that Zomato has strong growth levers in place, especially with its diversification into new business areas. Motilal Oswal, another brokerage, also expressed confidence in Swiggy, citing that it is in a stable position in the duopoly of food delivery platforms in India. They further forecast that Swiggy's Instamart business will continue to grow and help the company become profitable by December 2025.

Indraprastha Gas saw its shares surge by 6.5 percent following the announcement that its board will consider a proposal for bonus shares on December 10. The stock closed at Rs 383.60, with the company not yet disclosing the bonus ratio, which will likely be revealed at the board meeting. This news was received positively by investors, as the bonus share issue is often seen as a signal of the company’s growth prospects.

On the downside, Genus Power experienced a 5 percent drop after the Directorate of Enforcement conducted searches at the company’s corporate office and the residence of its chairman. While the company stated that its operations remain unaffected, the news caused a negative reaction from investors, resulting in a locked lower circuit.

Shares of Lancer Container Lines surged by 5 percent following the announcement of a new partnership with Dubai-based Ocean Voyage Shipping Line LLC (OVSL). This partnership is expected to boost Lancer Container Lines’ global presence. Despite this recent surge, the stock is still down by 54 percent for the year.

BSE Ltd, which has been gaining momentum, surged by over 14 percent, entering the F&O segment from the December series. Over the past month, BSE shares have gained 9 percent, and for 2024, they are up by 128 percent. This reflects a strong market interest in the stock, particularly as it gains a larger share of the F&O segment.

Lastly, Maharashtra Seamless also saw a significant surge, with its shares rising by 11 percent due to heavy trading volumes. As much as one crore shares of Maharashtra Seamless were traded, significantly higher than its usual trading volumes.

In another major development, Indus Towers saw a block deal on December 5, where 8 crore shares of the company changed hands, worth Rs 2,802 crore. This transaction, which represents a 3 percent stake in the company, was likely executed by Vodafone Group Plc, the UK-based telecom operator.

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