The Indian stock markets ended in a marvellous style on the closing day of the week with the Sensex and the Nifty gaining unprecedented heights. The BSE Sensex climbed more than 1,300 points and rose to 84,500+ while Nifty reached 25,800+ level for the first time ever. This marked improvement was, however, driven by the relatively optimistic influential factors such as; bolstered by upturns in foreign signals, healthy domestic economic signs and revived investors’ optimism.

There was across the board gain and banks, auto and energy led the gains. Market closed positive for the seventh session in a row and the Nifty Bank index scaled anoller high touching 54,066. Banking stocks — ICICI Bank, HDFC Bank and Kotak Mahindra Bank — have supported the index to climb by contributing greatly. The auto sector also witnessed a healthy buying interest with auto majors such Maruti Suzuki Mahindra & Mahindra and Tata Motors.

Global markets also helped in improving the sentiment as investors made good of the US Federal Reserve’s move to reduce interest rates by 50 basis points during the week. They are expecting for a more dovish monetary policy this move will in turn foster the growth of the economy as well as boosting the level of liquidity in the world markets. Asian markets also edged up with Japan’s Nikkei 225 and Korea’s KOSPI recording good gains.

The rally in Indian markets received further boost from the side of Foreign Institutional Investors (FII) purchase. Later on, FIIs started to buy Indian equities and this restored confidence in the market and was a much needed relief. DIIs also joined the bandwagon to go on a buying spree adding more fuel to the market’s upward movement.

Sectoral wise also it was highly bullish with 12 out of 13 sectoral indices traded in the green. The Nifty FMCG Auto Realty and Metal indices were up between 1-2 percent to prove that it was not only a restricted list of stocks that were on an uptrend. In this specific case, the metal sector performed well after a three day of down turn that was instigated by the analyst reports and target price hikes on the key stakeholders in the segment.

In the broader market the BSE Midcap and Small cap indices also contributed in the rally and they gained 1. 2 percent and 1. 4 percent respectively. This performance shows that the positive sentiment is not restricted in large-cap stocks only but has been extended to the rest market segments as well.

Some of the particular stocks that attracted investors were those in the top gainer list of the Nifty 50 index today and include: Coal India L&T JSW Steel and ICICI Bank. On the flip side a few stocks such as Hero MotoCorp IndusInd Bank and NTPC were an outlier and posted marginal decreases.

Trading activity in the options market also shot up during the trading session for the day. Call open interest was found to be at the highest at the 26,000 and 25,500 strikes and the Put open interest at the highest at the 25,000 and 24,500 strikes. These options data imply that traders expect the market to remain for the most part trading in a tight range just below and above 25,000 within the near-term span of 24-25,900.

Different market gurus and analysts have said this current rally is possible and genuine but at the same time, they have warned investors to be careful. Currently, the tone is positive from the bulls thanks to factors like global risks, geopolitical risks and profit-taking at higher levels may cause volatility in the forthcoming sessions.

More so, as the Indian market continues to grow to new highs it is important to point out that the Nifty has joined the MSCI Emerging Markets index as the largest country in that index than China. The move reflects the rising place of Invest India in the global investment map and the notion of the country as a safe haven for investors from across the world.

In the coming few months, market participants will be pinning their hopes on other central banks such as the Bank of Japan, the Bank of England, and the People’s Bank of China. Some of their policy decisions could in fact impact the global market trends and by extension the Indian equity markets.

In sum, it can be said that Friday’s fabulous show in the Indian stock markets are supported by a host of favourable factors – both home grown and foreign. It pending to be seen as the indices hit new records of their highs, how sustainable this situations is and what they will bullish or bearish signals depending on opportunities or threats which could be availed or flagged in this fiercely competitive and volatile market.