In a remarkable turnaround, the Indian stock market, which opened weak on Thursday morning, surged dramatically as the day progressed. By the closing bell, the Sensex had skyrocketed by 1,508 points, ending the session at 78,553, while the Nifty soared 414 points to settle at 23,851, comfortably crossing the 23,800 mark.
The sudden and broad-based rally added nearly Rs 4 lakh crore to the total market capitalization of BSE-listed companies, taking the overall market cap to Rs 418.98 lakh crore.
Here’s what drove this dramatic upturn in the Indian equity market:
1. Banking Stocks Led the Charge Ahead of Q4 Results
Ahead of the Q4 earnings season, investors aggressively bought banking stocks, expecting strong financial results from major lenders. The Bank Nifty jumped nearly 2%, driven by robust gains in HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank.
Market sentiment was particularly buoyant due to the anticipated performance of HDFC Bank, which is set to announce its results on April 19. The strong outlook for private lenders added a much-needed boost to market confidence.
2. Foreign Institutional Investors Pump in Big Money
Foreign Institutional Investors (FIIs) continued their buying spree, injecting Rs 3,936 crore into Indian equities on Wednesday alone. Over the past two trading sessions, FII investment has crossed Rs 10,000 crore.
According to Dr. V.K. Vijayakumar of Geojit Financial Services, global tensions like the US-China tariff situation are pushing global investors to look at India as a more stable and promising investment destination.
3. Positive Developments in Japan-US Trade Talks Boost Asian Markets
The ongoing trade talks between Japan and the United States also had a ripple effect across Asian markets, including India. Japanese benchmark index Nikkei rose by 0.7%, while the Japanese yen weakened, improving the outlook for Japanese exporters.
The unexpected participation of President Donald Trump in the high-level trade discussions and his announcement of “significant progress” further uplifted investor sentiment across Asia.
4. Weakening Dollar Strengthens Emerging Markets
The US Dollar Index dropped to 99.56 on Thursday, signaling a softer greenback. This development worked in favor of emerging markets like India, where a weaker dollar typically strengthens the rupee, reduces import costs, and boosts foreign capital inflows.
A stronger rupee also helps contain inflationary pressures and reduces the current account deficit, making Indian markets more attractive to global investors.
5. US Delays Tariffs, Bringing Relief to Global Trade
In a significant move, President Trump announced an extension of tariff exemptions on additional duties for 75 countries, including India, until July 9. This decision has provided temporary relief from escalating global trade tensions.
Investors reacted positively to this announcement, viewing it as a sign of potential stability in global trade dynamics — a key factor for export-heavy economies like India.
6. Crude Oil Prices Ease, Supporting Indian Economy
Another favorable factor for the market rally was the softness in global crude oil prices. Brent Crude traded at $66.40 per barrel, while WTI Crude stood at $62.90 per barrel.
As one of the world’s largest oil importers, India benefits significantly from lower oil prices. It helps in reducing inflationary pressure, lowering fuel costs, and easing the current account deficit, all of which are favorable for the broader economy and the markets.
The perfect mix of strong domestic cues — especially from the banking sector — combined with supportive global factors like easing oil prices, a weaker dollar, and positive developments in global trade relations, fueled this sharp surge in Indian equities.
With the Q4 earnings season set to kick off in full swing next week and strong FII inflows continuing, investors remain optimistic about further upward momentum in the near term.
However, experts also advise caution, as global volatility and geopolitical events can quickly change market dynamics. For now, though, bulls have firmly taken control of Dalal Street.
