Stock market today: Sensex, Nifty 50 gain for fifth session in a row. What drives the Indian stock market? What to buy?
The Indian stock market rebounded on December 5, with the Sensex and Nifty 50 rising over 1%. The Sensex gained over 1,800 points from the low. The Nifty 50 surged 2 per cent from the day's low level.
Stock market today: Extending their winning streak into the fifth consecutive session, Indian stock market benchmarks—the Sensex and the Nifty 50—ended higher by a per cent each on Thursday, December 5. Heavyweights such as Infosys, ICICI Bank, TCS, Bharti Airtel, and Reliance Industries were among the key contributors.
Shrugging off morning session weakness, the Indian stock market rebounded strongly. Both key indices, the Sensex and Nifty 50, surged over 1 per cent during afternoon trade, with the Sensex climbing 1,850 points from its intraday low.
The Sensex opened at 81,182.74 against its previous close of 80,956.33 and dipped 489 points to hit the intraday low of 80,467.37. The index, however, saw a swift recovery and surged about 1,850 points from the day's low to touch 82,317.74.
The Nifty 50 opened at 24,539.15 against its previous close of 24,467.45 and slipped as much as 172 points to 24,295.55. However, it recovered sharply and rose 562 points, or 2.3 per cent, from the day's low to hit an intraday high of 24,857.75.
The Sensex finally closed at 81,765.86, up 810 points, or 1 per cent, while the Nifty 50 settled 241 points, or 0.98 per cent, higher at 24,708.40.
Mid and smallcap segments of the BSE also rose, but they underperformed the benchmark Sensex. The BSE Midcap index climbed 0.27 per cent, and the Smallcap index inched up 0.16 per cent.
Investors earned about ₹2.5 lakh crore in a session as the overall market capitalisation of firms listed on the BSE rose to nearly ₹458.2 lakh crore from nearly ₹455.7 lakh crore in the previous session.
Sectoral indices today
The Nifty IT index jumped by 2 per cent, while the Nifty Bank, Financial Services, Private Bank, Oil & Gas and Auto index jumped almost by a per cent. Realty and PSU Bank indices, however, ended weak due to profit booking.
What drives the Indian stock market?
The domestic market is witnessing sharp gains ahead of the Reserve Bank of India's (RBI) monetary policy decision on Friday. The market expects the RBI to announce a cut in CRR (cash reserve ratio), injecting liquidity into the system and boosting banks' profitability.
Moreover, following a lacklustre Q2 earnings season, the market is now factoring in a potential revival in earnings growth from Q3FY25. This anticipation has also sparked stock-specific activity and reshuffling across the market.
Experts note a clear rotation across sectors and segments, with investors focusing on stocks and industries where they anticipate an earnings recovery.
“A lot of churning is happening across sectors. People are looking forward to healthy Q3 numbers from the banking sector, so banking stocks are rising. IT stocks are also rising. Wherever there are some green shoots, action is happening,” said Avinash Gorakshakar, the head of research at Profitmart Securities.
However, volatility in the market has increased, which was quite common in December.
“Market volatility in December is quite common. Volatility may increase after Donald Trump takes charge next month. After December 15, the market becomes dull because of a lack of liquidity as foreign institutional investors go on holiday. January may start upbeat as people will start discounting the Budget. The market is expected to be in a narrow range in the near term,” Gorakshakar said.
What to buy?
Look at domestic themes, said Gorakshakar.
“Cement looks interesting. Large cement players such as UltraTech Cement and Ramco Cement should do well. Capital goods and real estate also look attractive at this point. These are the sectors where the government is also spending. The housing financial sector is growing steadily. These sectors could be pockets of opportunities,” Gorakshakar said.
“PSU bank stocks look interesting, especially Bank of Baroda, Canara Bank, and PNB. These stocks have a lot of value. The third and fourth quarters are a pick-up quarter for the banking sector,” Gorakshakar said.
Manish Chowdhury, the head of research at StoxBox, is positive about cement, FMCG and pharma sectors.
With most of the negatives seemingly priced in and behind, Chowdhury is positive about cement sector. He expects a robust real estate activity and revival in government spending to lead to an estimated 550-600 million tonnes of cement production annually going ahead.
"The construction activity is likely to be fueled by the government's emphasis on infrastructure development, including expanding railroads, logistics centres, and affordable housing. We expect growing demand for housing in rural areas, backed by government housing schemes and affordability, to keep residential construction moving forward," said Chowdhury.
Government policies focused on rural development are expected to help fuel the FMCG sector's growth.
"Quick commerce platforms like Blinkit, Zepto, and Swiggy Instamart are reshaping the sector with faster deliveries and competitive prices. These platforms, along with e-commerce and digital payments, are making it easier for consumers in underserved areas to access FMCG products," Chowdhury said.
Regarding the pharmaceutical sector, Chowdhury believes most pharmaceutical companies may achieve 12-15 per cent growth in 2025 amid a focus on new product launches, increased volume growth, and rising demand for both generics and branded products. Additionally, pharmaceutical companies have strengthened their presence in chronic therapies, prioritized new product introductions, and explored new therapies to capitalise on emerging opportunities.
According to Yashovardhan Khemka, senior manager of research and analytics at Abans Holdings, investing in fundamentally strong companies in capital-intensive industries, such as iron and steel manufacturing, electronics, capital goods manufacturing, and automobiles, could yield favourable results over the medium to long term.
Moreover, Khemka pointed out that the pharmaceutical manufacturing sector in India is rapidly gaining a larger share of the global market in custom synthesis and bulk drug manufacturing as supply chains shift away from Chinese dominance. This sector is poised to benefit significantly from lower interest rates during its expansion phase and presents a highly lucrative long-term investment opportunity.
Besides, Khemka said that the overall geoeconomic uncertainty drives increased government defence spending, creating promising prospects in the defence sector.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
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