Indian equity markets witnessed a robust rally on Friday, December 19, as investor sentiment turned decisively bullish following encouraging inflation data from the United States. The benchmark indices closed significantly higher, with broad-based buying across sectors.
Market Indices and Sectoral Surge
The Nifty 50 index climbed 0.60% to end the session at 25,970 points, inching tantalizingly close to the key 26,000 psychological level. Its counterpart, the S&P BSE Sensex, advanced 0.53% to settle at 84,929. The rally was not confined to large caps; the broader market outperformed with the Nifty Midcap 100 and Nifty Smallcap 100 indices jumping 1.2% and 1.3%, respectively.
All major sectoral indices ended in the green. The realty sector stole the show, with the Nifty Realty index surging 1.9%. It was followed by strong performances from Nifty Chemicals, Nifty Auto, Nifty Oil & Gas, and Nifty Pharma, which all gained between 1% and 1.7%.
Key Drivers: US Inflation and Fed Rate Cut Hopes
The primary catalyst for the global risk-on mood was the release of US consumer price data for November. The figures showed that inflation rose by 2.7% year-on-year, a pace that was lower than market forecasts and marked a noticeable deceleration from the 3% increase seen in September.
This tamer inflation print has reinforced market expectations that the US Federal Reserve will maintain its path of interest rate reductions in the coming year. According to the CME FedWatch Tool, traders are now pricing in a 58% probability of a dovish policy move by the Fed as early as March. The positive global cue, combined with an upbeat forecast from chipmaker Micron, helped alleviate concerns about stretched tech valuations.
Stock-Specific Action: Who Gained the Most?
The bullish wave lifted shares across the board, with several prominent names emerging as the day's top performers. Stocks like OLA, Tata Elxsi, Paytm (One 97 Communications), PB Fintech (Policybazaar), Nykaa (FSN E-Commerce), and RVNL (Rail Vikas Nigam Ltd) were among the notable gainers during the session. Their significant upward moves contributed to the overall positive market breadth and reflected renewed investor confidence in both new-age technology firms and infrastructure-focused companies.
The day's trading action underscores the Indian market's sensitivity to global macroeconomic cues, particularly US monetary policy expectations. With inflation showing signs of cooling, investors are betting on a conducive environment for growth stocks, setting the stage for potential further gains as the year draws to a close.
