Three Reasons Why Sensex, Nifty Surged To Record Highs On Thursday
Financial services companies accounted for nearly a third of Nifty's gain on Thursday.
The Indian markets surged in the second half of Thursday's trading session led by metal, auto and banking stocks. The Nifty 50, India's benchmark index, surged by over 193 points in 15 minutes, ahead of their weekly expiry on Thursday, after trading below their opening price for a major part of the day. Similarly, the Sensex hit a record high rallying 1,400 points from its day low.
Here are three key reasons why Dalal Street witnessed a surge:
1. Financials Lead Index
Companies in the financial services space accounted for nearly a third of Nifty's 300 point gain, led by HDFC Bank Ltd., State Bank of India Ltd., ICICI Bank Ltd., and Kotak Mahindra Bank Ltd. which contributor to the major part of the gain among them.
2. Bharti Airtel
The only stock belonging to the telecommunication sector in the index rose by over 3% in the span of 30 minutes to hit a fresh record high on the exchanges, making it the top contributing stock to Nifty's gain.
Airtel Business, the B2B arm of the company signed an agreement with Sparkle, the first international service provider in Italy for additional capacity on a diversified low latency route between Asia and Europe.
Per the agreement, Airtel will take capacity from Sparkle on the Blue‐Raman Submarine Cable Systems in order to serve the growing demand for data services in India and neighbouring countries, a filing by the company stated.
3. Weekly Options Expiry
The index records increased volatility on the day of expiry for its weekly options contract, as stated by a recent study conducted by Securities and Exchange Board of India.
Nifty 50 sees increased volatility on Thursdays, with index levels surging or plunging at the time of the contract's expiry, especially as the market close nears.
