Sensex surges 800 points on final day of FY24: Key factors behind the rally

The combined market capitalisation of all listed stocks on BSE jumped by Rs 2.74 lakh crore to Rs 386.38 lakh crore.

Recent hotter-than-expected data triggered worries over a delay in interest rate cuts but the Fed's commentary at the policy meeting earlier this month eased concerns, as the central bank stuck to projections of three rate cuts this year.

Markets now expect a U.S. rate cut in June, but the inflation data on Friday could influence the timing.

Here are the top factors behind the Sensex rally today:

• Strong cues from US markets

Wall Street equities closed higher overnight, ahead of a key inflation reading later this week. The Dow Jones Industrial Average rose 1.22%, the S&P 500 gained 0.86% and the Nasdaq Composite gained 0.51%.

Asian shares were mixed on Thursday. Chinese markets recouped losses from the day before. Hong Kong's Hang Seng index gained 1.1% to 16,579.99, while the Shanghai Composite advanced 1.2% to 3,029.01. Australia's S&P/ASX 200 jumped 0.9% to 7,887.00. Taiwan's Taiex was little changed. In Tokyo, the Nikkei 225 lost 1.2% to 40,283.44.

• Gains in bank & financials

Financials rose after the central bank eased recently-tightened rules for lenders' investments in alternative investment funds (AIFs).

The Reserve Bank of India (RBI) on Wednesday relaxed norms, brought in December, that mandated lenders set aside higher provisions if they bought into alternative investment funds, that, in turn, invested in the lender's borrowers.

Heavyweights Bajaj Finance and Bajaj Finserv rose about 4% each after news reports said housing finance arm Bajaj Housing Finance had initiated preliminary talks with several investment banks about a potential initial public offer. ICICI Bank and State Bank of India were among the top ten gainers on 50, adding 1.6% and 1.9%, respectively.

• Solid FII inflows

Foreign portfolio investors bought Indian shares worth Rs 2,170 crore on a net basis on Wednesday, while domestic institutional investors purchased a net Rs 1,198 core worth of stocks.

• Technical indicators

Technical indicators suggest staying bullish on Nifty as long as it holds above the 21711 support level, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

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