Snapping a two-day losing streak, Indian equity indices reversed early losses and closed with gains in a highly volatile market on Wednesday led by auto, FMCG, IT and energy stocks.
The 30-share BSE benchmark Sensex advanced 690 points or 0.98% to settle at 71,060. The broader NSE Nifty gained 215 points or 1.01% to end at 21,454.

Meanwhile, the market capitalisation of all listed companies on BSE surged by Rs 5.42 lakh crore to Rs 371.4 lakh crore.

Nifty Media was the top sectoral index after closing over 3% higher. Nifty Metal also closed nearly 3% higher. Nifty Auto, FMCG, IT, Pharma, PSU Bank, and Oil & Gas also closed 1-2% higher. Meanwhile, the Nifty Midcap100 index gained 1.8%, and the Nifty Smallcap100 index rose 1.7%.

Here are five factors behind Wednesday’s rise in Sensex, Nifty:

1. Sebi gives FPIs 7 months to liquidate holdings

Market regulator Sebi has offered a relief of an additional seven months to offshore funds to liquidate holdings, in case they fail to disclose data about their investors by January 29, a report quoting sources suggested.

According to a Reuters report, the funds would have an additional 10-30 days to provide the investor data after the January 29 deadline. Even thereafter, if they fail to provide any details, they would have a further six months to reduce their holdings, one source told Reuters.

2. HDFC Bank and RIL led the rally

The index heavyweights HDFC Bank and Reliance Industries alone led about 286 points of Wednesday’s gains. HDFC Bank shares surged 2% on Wednesday, while Reliance rose about 1.2%. India’s largest bank’s shares were under pressure amid the disappointment that came from the December quarter results.

3. Global Market

Positive cues from global peers also led the rally in Indian equity markets. On Wednesday, global shares rose, fuelled by positive tech earnings and optimism that Chinese authorities will offer support to its stock markets.

Investors in Asia have focused on Chinese stocks after a wretched start to the year. Chinese authorities were preparing a package of measures worth $278 billion to stabilise the slumping stock market. This offered some hope that markets may steady.

The MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1%. The MSCI world equity index, which tracks shares in 47 countries, gained 0.3%.

4. Decline in dollar index

The dollar index, which measures the US currency against six rivals, fell 0.5% and was last at 103.13. However, the index is up nearly 2% this month, on course for its strongest monthly performance since September as traders walk back their expectations of early and steep Fed interest rate cuts.

5. Oil Impact

Oil prices witnessed marginal decline on Wednesday, weighed down by concerns over tepid demand and a stronger dollar even though escalating geopolitical tensions limited the losses.

The front-month March contract for Brent crude fell 7 cents to $79.48 a barrel. US West Texas Intermediate crude also ticked down 7 cents to $74.44 a barrel.

(With inputs from agencies)

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