Record high! These 5 heavyweight stocks contribute over 50% to Sensex's 1,115 points run

Top 5 index heavyweights drove over 50% of Sensex's 1,115-point surge, hitting a record high of 75,336.44. Rally fueled by strong Q4 earnings, RBI's record dividend payout, election outcome certainty, and reduced foreign selling.

Five index heavyweights - HDFC Bank, Reliance Industries, L&T, ICICI Bank, and Axis Bank contributed over 50 percent to the over 1,115 points run in S&P BSE Sensex.

The benchmark index soared over 1,115 points (over 1 percent)in intra-day deals to reclaim the 75,000 mark and hit its record high of 75,336.44. Today's surge comes on the back of buoyed by better-than-expected Q4 earnings, the RBI's record dividend payout, increased certainty surrounding the election outcome, and reduced foreign investor selling in the last few days.

Meanwhile, the NSE Nifty 50 index reached a fresh all-time high of 22,959, marking a 362-point increase to 22,830. Simultaneously, the Nifty Midcap index also achieved a record high, reaching 19,568 in today's trading. The Nifty SmallCap index hovered around 15,920, just 50-odd points below its peak of 15,973.

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"Indian markets hitting a new record is the market’s message of political stability after the elections. The rally is healthy since it is led by fairly valued largecaps," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

HDFC Bank was the top contributor to the Sensex's rally, with a 200-point contribution. The stock rose almost 2 percent. Meanwhile, RIL (145 points), L&T (132 points), and ICICI Bank (131 points) also contributed over 100 points each to today's gain in the benchmark index. Meanwhile, Axis Bank contributed 89 points to the Sensex.

Moving on to stock price performance in the index, RIL gained 1.6 percent, L&T advanced 3.6 percent, ICICI Bank was up 1.9 percent and Axis Bank rose 3.3 percent.

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L&T was the top gainer in the index, up over 3 percent. Meanwhile, Maruti, M&M, IndusInd Bank, Titan, UltraTech Cement, Bharti Airtel, Bajaj Finserv, and SBI also rose over 1.5 percent each in today's deals.

However, only Sensex 4 stocks were in the red - JSE Steel, down 0.2 percent, NTPC, down 0.9 percent, Sun Pharma, down 2.9 percent and PowerGrid, down 3.1 percent.

Reasons behind today's surge

According to experts, the unprecedented ₹2.11 lakh crore dividend from the Reserve Bank of India, announced yesterday, is anticipated to aid the government in managing the fiscal deficit. This a surprise for the market as the market was projecting a 1 lakh crore dividend.

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Furthermore, investors have now become more optimistic about a decisive victory for the BJP in the ongoing general elections. According to analysts at foreign brokerage Bernstein, there is a higher likelihood of the BJP government winning approximately 330-350 seats.

Additionally, foreign portfolio investors have decreased their selling activity in recent days. Over the past five trading sessions, FIIs have net sold stocks worth ₹1,813 crore, compared to net sales totaling ₹38,186 crore in May thus far. Moreover, the US 10-year yield has declined to 4.43 percent from a peak of 4.73 percent one month ago.

Sectors

The rally in the benchmark index was mainly fueled by buying in auto, capital goods and banking sectors. BSE Auto jumped the most, up 2 percent followed by BSE Bankex, BSE Capital Goods, BSE Industrials and BSE Financial Services, up over 1.5 percent each. BSE Metal and BSE Healthcare were the only 2 sectors in the red, down 0.9 percent and 0.5 percent.