Indian Equities Ignite: A Resounding Rally as Sensex Nears Record Peak

India's stock markets are roaring back to life, echoing the bullish sentiment seen on Wall Street as the Sensex surged a remarkable 1,000 points on Thursday. Driven by robust domestic economic fundamentals and a renewed influx of foreign investment, the Sensex closed at 83,756 points, a mere 3% shy of its September-end peak of 85,978 points.

Not to be outdone, the Nifty on the National Stock Exchange (NSE) also rallied impressively, gaining 304 points to settle at 25,549 points. It now stands just 2.8%, or 728 points, away from its own record high, signaling a broad-based recovery across Indian equities.

Global and Domestic Tailwinds Fuel the Surge

The dramatic upswing comes on the heels of several positive developments. A notable easing of tensions in West Asia, which had seen escalating conflict between Israel, Iran, and the US over the past two weeks, provided a much-needed sense of stability for global investors. This newfound calm, coupled with a weakening US dollar and a decline in crude oil prices – a significant boon for India, a major oil importer – encouraged investors to dive back into the market.

Domestically, the Reserve Bank of India's (RBI) proactive move earlier this month to cut interest rates by half a percentage point, alongside consistently stable inflation figures, significantly bolstered investor confidence. "The domestic markets witnessed a decisive session on Thursday, supported by stable global cues," remarked Ajit Mishra of Religare Broking. He added that while the market saw a range-bound movement in the first half, momentum picked up considerably as the day progressed, propelled by strong buying in heavyweight stocks across various sectors.

Religare Broking now anticipates that India's leading indices are well-positioned to gradually reclaim and surpass their previous record highs.

Foreign Funds Lead the Charge, Investor Wealth Soars

Thursday's powerful rally was spearheaded by a significant return of foreign funds. Foreign institutional investors (FIIs) net bought stocks worth an astounding Rs 12,594 crore, marking the largest single-session net inflow since September 20, 2024. In contrast, domestic funds were net sellers, offloading Rs 195 crore, as per data from the BSE website. This strong upsurge in the market added approximately Rs 3.5 lakh crore to investors' wealth, pushing the BSE's total market capitalization to a staggering Rs 457.5 lakh crore.