Sensex rallies +4,720 points in past 5 days: Here’s why?

The Indian stock market has staged a remarkable comeback over the past four days, following positive global cues and domestic triggers. The Sensex has jumped nearly 4,700 points, while the Nifty 50 has crossed the 23,800 mark, recording its strongest weekly performance since February 2021.

What Triggered the Rally?

The initial boost came from US President Donald Trump’s 90-day tariff pause, easing tensions in global markets. Following this, a series of favorable developments at home and abroad fueled the market’s continued rise.

The Nifty 50 index has surged by 1,450 points — from 22,399 to 23,851 — across these four sessions. The Sensex also climbed sharply, from 73,847 to 78,553.

Top 5 Factors Behind the Market Rally

Indo-US Trade Deal Prospects:

The rally started after Trump’s tariff pause, but gained further momentum with news of Indo-US trade talks. The upcoming visit of US officials to India and rising trade tensions between the US and China have boosted hopes for a favorable deal with India — a move seen as mutually beneficial amid global trade shifts.

India-China Trade Talks Buzz:

With the US-China trade war escalating, China is reportedly open to discussions with India to strengthen trade ties. Market experts believe China is eager to offset losses from US tariffs, and India is stepping up to explore this opportunity.

Economic Reform Hopes:

Investors are optimistic about a fresh wave of economic reforms under Modi 3.0. With India gradually opening up its markets, business leaders have suggested policy adjustments to better align with global trade patterns, fueling bullish market sentiment.

FIIs Return to Indian Markets:

Foreign Institutional Investors (FIIs) have turned net buyers, investing around ₹14,670 crore last week alone. With the US dollar weakening and American markets under pressure, global investors are shifting their focus towards emerging markets like India.

Above-Normal Monsoon Forecast:

The Indian Meteorological Department (IMD) has predicted a better-than-normal monsoon this year. This is expected to boost rural incomes, keep inflation under check, and improve the country’s economic outlook — all of which are positive for the stock market.

Banking Stocks Lead the Charge

Banking stocks were the top performers, rallying on the back of easing inflation data and hopes for potential rate cuts by the Reserve Bank of India (RBI).

Final Word

The Indian stock market’s recent performance reflects a mix of global relief, domestic optimism, and investor confidence. While this rally is encouraging, experts advise caution and recommend consulting certified financial advisors before making investment decisions.

Disclaimer: The views expressed are those of individual analysts. Please seek professional advice before investing.