Market closes at five-month high: 5 key reasons behind today's surge in Sensex, Nifty

Indian equity benchmarks extended gains for a fourth consecutive session on Monday (August 3), with the BSE Sensex climbing 544 points to close at 78,639 and the NSE Nifty 50 surging 391 points to 24,774, its highest level in five months.

The Nifty also witnessed a major change in its levels on the first day of the Closing Auction Session (CAS). Ahead of the closing auction, the index was at 24,590 before ending the day at 24,774.

Here are the five key factors that drove the market higher:1. Financials and IT stocks powered the rally

Nearly 45 Nifty 50 constituents ended the session in the green, with information technology and financial stocks contributing the most to the benchmark gains.

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The Nifty Bank index jumped 983 points to 58,248, while the Nifty Midcap index advanced 764 points to 63,679.

2. IndiGo led gainers as crude prices fell

IndiGo emerged as the top gainer on the Nifty, supported by a decline in crude oil prices.

Among the benchmark gainers, Grasim Industries, Tata Consultancy Services (TCS), IndiGo and Infosys rose 4-5%. On the losing side, Apollo Hospitals, Sun Pharmaceutical Industries and Maruti Suzuki India ended the session in the red.

3. Earnings reactions lifted several stocks

Quarterly earnings and management commentary drove sharp stock-specific moves. APL Apollo Tubes surged 7% following strong commentary after its first-quarter earnings.

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Divi's Laboratories gained 7% after reporting strong first-quarter numbers. ABB India advanced 4% as order inflows remained healthy, while Shree Cement rose 4% after positive management commentary and strong volumes.

4. July sales and business updates supported select stocks

Ashok Leyland climbed 5% after reporting strong July sales. ITC gained after reporting better-than-expected cigarette volumes, with Godfrey Phillips India also moving higher during the session.

Among mid-cap stocks, L&T Technology Services, Jubilant FoodWorks, Aditya Birla Capital and Vishal Mega Mart were among the top gainers.

5. Weak earnings and regulatory developments weighed on select shares

Muthoot Finance recovered from intraday lows but still ended 7% lower after reporting lower-than-expected first-quarter earnings. Meanwhile, Indian Energy Exchange (IEX) declined 4% after the Supreme Court allowed the Central Electricity Regulatory Commission (CERC) to frame market coupling regulations.

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Market breadth remained positive, with the advance-decline ratio at 5:2, indicating broad-based buying across the market.

From the Sensex basket, Shriram Finance Ltd, InterGlobe Aviation Ltd, Infosys Ltd, Tata Consultancy Services Ltd, Bajaj Finserv Ltd and ITC Ltd were the major gainers.

Sun Pharmaceutical Industries Ltd, Bharti Airtel Ltd, Apollo Hospitals Enterprise Ltd, Maruti Suzuki India Ltd, Tech Mahindra Ltd and Oil and Natural Gas Corporation Ltd were the biggest laggards.