Indian equity markets saw a robust rally on Friday, May 23, with the SENSEX surging over 600 points and the NIFTY50 index holding firmly above the 24,750 mark. The upbeat sentiment was driven primarily by strong quarterly earnings from ITC, which reported its results after market hours on Thursday. ITC’s stellar performance, including a significant exceptional gain from the demerger of its hotels business, provided a major boost to the indices, with the stock alone contributing nearly 10% of the SENSEX’s total gains in early trade.
The positive momentum was further supported by encouraging cues from Asian markets. Major indices across the region, including Japan’s Nikkei, Hong Kong’s Hang Seng, and South Korea’s KOSPI, were trading higher, reflecting improved risk appetite among global investors. This optimism was partly attributed to developments in the US, where government bonds found buyers following the passage of President Trump’s tax bill in the lower house, despite lingering concerns about US debt levels. The spillover effect from Asia helped Indian benchmarks recover from a subdued start and gain traction through the morning session.
Another key factor bolstering Indian equities was the decline in international crude oil prices. Brent crude slipped 0.5% on expectations that OPEC+ may consider raising output at its next meeting. Lower oil prices are generally positive for India, which imports the majority of its crude requirements, as they help ease inflationary pressures and improve corporate margins across sectors.
The rally was broad-based, with most sectoral indices on the National Stock Exchange trading in the green. The NIFTY IT index led the pack with a 1% gain, while FMCG, Oil & Gas, Realty, Metal, PSU Bank, and Media indices also posted notable advances. However, the pharma sector lagged, with the NIFTY Pharma index down 0.8% due to selling pressure in Sun Pharma after its quarterly results failed to impress investors.
In the broader market, both the NIFTY Midcap 100 and NIFTY Smallcap 100 indices registered gains, indicating widespread buying interest beyond the large-cap space. Market breadth remained firmly positive, with nearly twice as many advancing stocks as decliners on the BSE. Among the top performers in the NIFTY50 basket were ITC, Grasim, Infosys, Trent, Tata Consumer Products, and HCL Tech, while Sun Pharma, Hindalco, and ICICI Bank were among the notable laggards.
Analysts noted that Friday’s surge was a welcome respite after a period of volatility and profit-taking. With strong earnings from blue-chip companies like ITC and a favorable global backdrop, investor confidence appears to be on the mend. Going forward, market participants will be watching for further cues from both domestic earnings and global developments, with key support for the NIFTY seen around the 24,500 level.
