6% Mkt Rally Adds Rs 25.77 Lakh Cr To Investors’ Wealth In 4 Days

New Delhi: Equity benchmark indices Sensex and Nifty surged more than 6 per cent in the last four trading sessions, as a temporary pause on tariffs by the US, return of foreign investors to the domestic market, and prediction of an above-normal rainfall in the upcoming southwest monsoon season lifted investors’ sentiments.

Moreover, retail inflation dipping to a nearly six-year low also raised hopes for a third rate cut by the Reserve Bank of India (RBI), according to market experts. In the last four trading days, the BSE benchmark index jumped 4,706.05 points or 6.37 per cent, and the NSE Nifty surged 1,452.5 points or 6.48 per cent. Accordingly, investors’ wealth rallied by Rs25.77 lakh crore to Rs4,19,60,046.14 crore ($4.90 trillion) in the past four days. Stock markets are closed on Friday for ‘Good Friday’.

According to Vishnu Kant Upadhyay, AVP, Research & Advisory, Master Capital Services, several factors like foreign fund inflows, temporary pause on tariffs by the US and further monetary easing by the RBI have converged to drive the recent sharp rally in the Indian markets despite global trade uncertainty.

“In the last three trading sessions, foreign portfolio investors purchased over $1 billion worth of Indian equities after a prolonged selling streak. Further, the announcement of a temporary pause on tariffs by the US and potential negotiations with countries also led to the relief rally,” Upadhyay said.

Moreover, the RBI’s 25 bps rate cut on April 9, and its shift of stance from ‘neutral’ to ‘accommodative’ added fresh momentum to the equity market, as investors priced in further monetary easing, he noted.

On April 9, the RBI cut interest rates for a second consecutive time. The Monetary Policy Committee (MPC), consisting of three central bank members and an equal number of external members, voted unanimously to cut the repurchase or repo rate by 25 basis points to 6 per cent. RBI changed its policy stance to “accommodative” from “neutral”, indicating the possibility of more rate cuts in future, Governor Sanjay Malhotra said, while announcing the MPC decisions.