Sensex Surges Over 700 Points, Nifty 50 Crosses 26,000 – 5 Reasons Behind Today’s Stock Market Rally

The Indian stock market began on a very positive note on Thursday, with the Sensex rising more than 700 points and the Nifty 50 surpassing 26,000, as the market was buoyed by the news of possible India-US trade deal. Even though the global markets were weak, the domestic equities were up, thanks to the buying in major companies and good Q2 earnings.

At the opening of the trading day, the BSE Sensex rose by 727.81 points (0.86%) to 85,154.15, while the Nifty 50 increased by 188.60 points (0.73%) to 26,057.20. At 11:25 AM, the Sensex was up by 664.03 points at 85,090.37, and the Nifty 50 was up by 180.80 points at 26,049.40.

In terms of sectors, IT, private banks, fast-moving consumer goods (FMCG) and metals were the main gainers, while real estate and oil & gas were the main losers. The Nifty Midcap 100 was up 0.2% and the Nifty Smallcap 100 was down 0.1%. The Bank Nifty was up 0.5% at 58,200.

5 Key Reasons Behind Today’s Rally

1. India-US Trade Deal Buzz

Markets are reacting to reports that India and the US may soon sign a trade deal, reducing tariffs on Indian exports from 50% to 15–16%. Discussions also involve gradual reduction in Indian imports of Russian oil, with energy and agriculture as key sectors. Analysts say such a deal would boost export competitiveness and investor confidence.

2. Upbeat Q2 Results

Stable quarterly results from major companies like Reliance Industries have improved risk appetite among investors. Analysts expect a strong H2FY26 recovery, backed by robust consumption and stabilized earnings expectations.

3. Heavyweights Driving the Market

Rally in index heavyweights, especially IT and banking stocks, pushed benchmarks higher. Infosys, HCL Technologies, Tata Steel, Axis Bank, TCS, Tech Mahindra, and Hindustan Unilever gained over 1% each, lifting the Nifty 50 above 26,000 and Sensex above 85,000.

4. FII Buying Continues

Foreign Institutional Investors (FIIs) extended their buying streak, acquiring equities worth ₹96.72 crore on October 21. Meanwhile, Domestic Institutional Investors (DIIs) sold shares worth ₹607.01 crore, further fueling market momentum.

5. Short-Covering Rally

The market is witnessing short-covering after recent consolidation, particularly in large-cap stocks. Textile and other export-oriented stocks are seeing buying interest amid India-US trade deal optimism. Technical indicators suggest high momentum, with Nifty trading near upper Bollinger bands, signaling potential continuation of the rally.

Market Outlook

Analysts advise a cautious buy-on-dips approach amid volatile global cues. Booking partial profits during rallies and maintaining tight stop-losses is recommended. Fresh long positions may be considered if Nifty sustains above 26,200, while the broader market remains cautiously bullish.

“Upside objective is set at 26,186, with 26,800 as an optimistic target. Downside is at 25,780, but a sharp reversal is not expected today,” said Anand James, Chief Market Strategist, Geojit Investments.

Investors should monitor global developments, corporate earnings, and trade deal progress as key factors influencing market direction in the coming sessions.