Here’s Why Nifty 50 Shot Up in the Last 1 Hour!

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The benchmark Nifty 50 index continued to scale to newer highs as the bull run kept investors’  confidence intact. After opening on a positive note, for the most part of the day, the Nifty 50 index almost traded sideways with a bullish tilt. However, before going into the session’s close both the Nifty and Sensex shot up aggressively.

At around 2:45 PM IST, the Nifty was trading at 18,685 but within the next few minutes, it soared to a high of 18,810, gaining more than 100 points. The reason behind such a sharp rally was the rebalancing of the MSCI (Morgan Stanley (NYSE: MS ) Capital International) India Index. It is an index of India-based equities that gets rebalanced periodically, just like other indices.

After the rebalancing, a total of 11 stocks were added to the index while 1 was removed - from the MSCI India Domestic Index. While from the MSCI Domestic Smallcap Index, a total of 43 new securities were added and 16 were excluded. So ultimately, there was a net inclusion of 17 securities that took place in today’s session.  

On 10 November 2022, MSCI issued the list of securities that were to replace some of the existing ones in the index. However, the rebalancing was to take place today, in the last ~30 minutes before the closing. The new changes would be taking place from the next session, i.e. tomorrow, 1 December 2022. Due to this change in the index, the passive funds that use this MSCI index as their benchmark also had to adhere to the rebalancing.

These passive funds do not have any other option as their sole purpose is to match the returns of the index, not to outperform. Hence, the new securities that were to be added today witnessed a high demand from these funds to be included in their portfolios.   

This was one of the reasons. The second probable reason was the speculation of the Q2 FY23 GDP numbers of India, which came after the market. India recorded a YoY GDP growth of 6.3% in the July-September 2022 quarter, a noticeable slowdown compared to an 8.4% growth in the same quarter last year. Although, this does not seem to make any dent in the SGX Nifty price, which is currently stable, trading at 18,907, by 6:53 PM IST. 

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  • Nand Koradiya @Nand Koradiya
    😀😀
    Like 0
  • Sunny Kumar @Sunny Kumar
    Really impressive information. You are sharing different content which is meaningful. Keep Growing.
    Like 3
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Thanks Sunny :)
      Like 1
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  • Basant Patra @Basant Patra
    It will move Downward after Gujarat Election and Will again Up after Results but will see Downward Trend from 9th Dec Onwards - NOTE IT...
    Like 5
    • Rajesh Kumar @Rajesh Kumar
      @Basant Patra Easy pesy prediction. I don't agree.
      Like 0
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  • namami ghosh @namami ghosh
    kudos to Guruji for yet another insightful blog. keep them coming!
    Like 7
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      I am glad you are liking 'em.
      Like 1
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  • vasanth vasanth @vasanth vasanth
    Good information thanks for sharing
    Like 2
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      You're welcome, Vasanth. This is what I'm here for :)
      Like 0
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  • Chandrasekaran Venkatachalam @Chandrasekaran Venkatachalam
    You were saying bearish divergence etc., before this rally
    Like 2
  • Rajesh jolly @Rajesh jolly
    where can we see rebalanced stocks 🙏
    Like 0
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Hi Rajesh, you can get the entire list on the MSCI website.
      Like 1
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  • Sagar Thummar @Sagar Thummar
    Hey thanks man for valuable information
    Like 1
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      I'm glad you liked it :)
      Like 0
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  • Ria Singh @Ria Singh
    thanks a lot
    Like 1
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Happy to serve my lovely readers, Ria :)
      Like 0
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  • Siva Sami @Siva Sami
    Any index stocks included in rebalancing which moved the index?
    Like 0
  • Anjay Km @Anjay Km
    Excellent article
    Like 2
  • Deepak Patni @Deepak Patni
    very insightful information
    Like 3
  • John Cena @John Cena
    next week market will cross 20000 in nifty
    Like 1
  • GEORGE THOMAS @GEORGE THOMAS
    Very useful information. Many thanks..
    Like 4
  • Dev Dutt @Dev Dutt
    In time
    Like 1
  • Balraj Laungani @Balraj Laungani
    Bluff
    Like 0
  • Nabarun Halder @Nabarun Halder
    Thank you for explaining this sudden upsurge. I bet Nifty will shed some of its gain tomorrow.
    Like 10
    • Francis Lobo @Francis Lobo
      No
      Like 0
    • Rohan Mukherjee @Rohan Mukherjee
      It will rise in morning session then fall in afternoon
      Like 1
    • my politics naa ishtam @my politics naa ishtam
      Get ready to see 19000 todt at least once.
      Like 0
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