Four key factors that led Sensex to jump over 500 points

Markets were on a high today! The S&P BSE Sensex jumped over 500 points, while the broader Nifty50 topped its key 8,000-mark. We have clubbed four domestic and global factors that contributed to the market surge we witnessed on the Dalal Street right now:

1) Morgan Stanley surprises market

Morgan Stanley is bullish on India. The global brokerage has upgraded Indian stock market to 'overweight' from 'equalweight', stating valuations relative to emerging markets have become more attractive. The brokerage also said that overweight positioning among fund managers has come down.

Morgan Stanley believes rising dividends, GST Bill prospects, further monetary policy easing and benign monsoon are major potential catalysts for domestic equities.

2) Citigroup sees growth improvement

Citigroup sees India to grow at the highest pace in six quarters on account of uptrend in economic activity and favorable base effect. The global financial services major said India's GDP growth for the fourth quarter of 2015-16 is likely to improve to 7.8 per cent.   

"Given the sequential uptrend in several economic activity indicators and supported by a favorable base effect, we expect real GVA (Gross Value Added) growth to improve to 7.8 per cent y-o-y in Q4 vs 7.1 per cent in Q3," Citigroup said in a research note.

3) Rain Gods are happy!

A few days after India Meteorological Department (IMD) predicted a delay in the onset of monsoon in Kerala, Skymet on Tuesday revised higher its forecast for the 2016 southwest monsoon to 109 per cent of the long period average (LPA) from 105 per cent of LPA predicted earlier.  

4) US home sales data soothes rate fears

Domestic markets along with other global markets rallied as upbeat US home sales supported the view that the economy may be strong enough for the Federal Reserve to raise interest rates in coming months.

US new home sales data on Tuesday showed a jump in April to their strongest monthly pace in more than eight years, with prices setting record highs. The gains eased investors' fears that the economy may not be resilient enough to withstand an increase in borrowing costs, however modest.