December Rally: What Drove Nifty & Sensex Higher on 3 Dec 2024
On 3 December 2024, Indian markets enjoyed a strong rebound — Nifty closed at 24,457.15, up ~0.75%, while Sensex ended at 80,845.75, up ~0.74%. This marked the third straight session of gains, and investor optimism was palpable across Dalal Street.
Why the Markets Rebounded
Heavyweights led the charge
The primary driving forces behind the rally were heavy-weight constituents of the indices: HDFC Bank and Reliance Industries — both of which gained significantly and contributed disproportionately to the indices’ rise.
Alongside these, there was broad-based buying across sectors — mid- and small-cap stocks also outperformed, indicating that the rally was not confined to the large caps alone.
Sector rotation — financials, metals, and PSU banks rally
The financial sector, including both private and public banks, was a key beneficiary. The index of PSU banks (public-sector banks) registered strong gains, with expectation of favourable regulatory or macro moves boosting sentiment.
Metal and energy-related stocks also saw buying — buoyed partly by expectations of increased government infrastructure spending, which tends to drive demand for metals and related raw materials.
Valuation resetting triggered renewed interest
In the weeks prior, the markets had fallen, dragging valuations lower. That correction appears to have rekindled interest from investors who began viewing many largecaps and midcaps as attractively valued. This “value-buying” — buying good companies at lower valuations — helped trigger the rebound.
Positive market breadth & improved investor sentiment
Analysts observed the market breadth had turned decisively bullish — more stocks participating in the rally rather than just a handful of heavyweights. That shift is often a hallmark of healthier, more sustainable rallies.
What This Means: Near-Term Momentum & What to Watch
With the indices now positioned above important technical thresholds (various EMAs on daily charts), many market watchers saw the move beyond 24,500 on Nifty as a key breakout zone. A decisive break could open the path toward higher levels — provided the rally is supported by sustained buying across sectors.
The broad participation — from banking and metals to mid/small caps — suggests that the rebound was not purely speculative or limited to a handful of glamour stocks. If sectors like banking and metals continue to do well, and if corporate earnings back the optimism, this up-leg could have legs.
However, as always, macro headwinds (global economic conditions, commodity prices, domestic policies) remain relevant. Sectors that lagged — like consumer staples or FMCG (dragged by concerns such as a possible tax/GST hike) — could act as drags if negative news emerges.
The Mood in the Street
There was a renewed sense of confidence among investors — both institutional and retail. Many saw this rebound as more than a short-term bounce; rather, a signal that the market might be stabilizing after the recent correction.
With heavyweights leading, but mid- and small-caps also joining in, market participants felt the breadth and depth of the rally added substance to the gains, as opposed to purely headline-driven spikes.
Conclusion
The rally on 3 December 2024 was propelled by a confluence of factors — beaten-down valuations, strong showing by heavyweights like HDFC Bank and Reliance, a broader sectoral uptrend with financials and metals leading, and an improved market sentiment.
More importantly, the breadth of participation — extending beyond just a few blue chips — gave the move legitimacy. For investors, it signaled that this could be more than a fleeting bounce; it might be the start of a more sustained upward phase — contingent, of course, on global macro stability and supportive domestic developments.
Reviewed by Aparna Decors
on
December 03, 2025
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