Sensex Soars 500 pts, Nifty above 24,400 – Key Reasons Behind Today’s Rally

The Indian benchmark indices surged by 1% today, May 2 amid stronger domestic currency, strong FII outflows and global cues.

Sensex surged by 917.17 points or 1.14% to clock at an intraday high of 81,159.41, while Nifty went up by 254.95 points or 1.04% to 24,589.15.

As of 11:06 am, Sensex was trading at 80,681.75, up 439.51 points or 0.55%, while Nifty was up by 91.10 points or 0.37 percent at 24,425.30. Close to 1996 shares gained, 1199 shares declined, and 135 shares remained unchanged.

Key reasons for stock market’s rally

1. Rupee Appreciation

The domestic currency appreciated, crossing the 84-per-dollar mark for the first time since October 1, 2024. The rupee opened 40 paise stronger at 84.09 and later strengthened to 83.90 against the greenback.

As per experts, the rally can be attributed to strong inflows in both equities and debt markets.

2. US-China trade talks

Chinted hinted at its openness to resume trade talks with the United States. China’s Commerce Ministry received signals from Washington seeking dialogue, raising hopes of easing tensions between the world’s two largest economies, Bloomberg reported.

“The US has recently sent messages to China through relevant parties, hoping to start talks,” the Chinese ministry said, adding that Beijing is evaluating the possibility.

3. FII buying

Foreign institutional investors (FIIs) bought Indian equities worth ₹50.57 crore on Wednesday, April 30, marking FIIs’ consistent buying activity for eleven consecutive sessions. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The surprising resilience of the market has been primarily driven by sustained FII buying, totalling Rs 37,375 crore in the last eleven sessions. A weaker dollar, softening crude prices, declining interest rates in India and early signs of recovery in demand are all aiding the rally.”

4. GST Collections

Goods and Services Tax (GST) collection soared to an all-time-high of 2.37 lakh crore in April, up 12.6% YoY. The strong GST collections indicate strong consumption trends.