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(Bloomberg) -- Indian stocks rallied at the beginning of the new year to outperform their biggest Asian peers.

The NSE Nifty 50 Index rose 1.9%, the biggest gain since Nov. 22, to close at 24,188.65 on Thursday. The S&P BSE Sensex Index closed 1.8% higher. The surge contrasts with a 0.3% drop in the MSCI Asia Pacific index, weighed by weak economic data coming out of China.

Software exporters and carmakers were the major contributors to the rally.

“This is purely a short covering move on Nifty’s weekly expiry,” said Manish Chowdhury, head of research at brokerage StoxBox, adding foreign investors were heavily short. “I’ll wait two or three more days for a clear trend,” he said.

Overseas investors’ bearish bets on Nifty futures Wednesday were the highest since June last year, according to data compiled by Bloomberg.

The Nifty index advanced for the ninth straight year in 2024 with a modest 9% return, as sustained domestic buying cushioned heavy foreign fund outflows in the December quarter. Concerns over a slowing economy and higher valuations may continue to weigh on the outlook for 2025.

Technology firm Infosys Ltd. gained as much as 4.3%, contributing the most to Nifty’s advance, while HCL Technologies Ltd. hit a fresh record high.

Automakers Maruti Suzuki India Ltd. and Mahindra & Mahindra Ltd. rallied after strong December sales helped ease concerns over the huge backlog of unsold stock.

--With assistance from Chiranjivi Chakraborty and Savio Shetty.