The Indian stock markets are on a roll. After a quiet opening, both the Sensex and the Nifty surged with the Sensex jumping over 1,500 points intra-day. The Sensex hit an intraday high of 78,457 and the Nifty 50 reached 23,831 levels in the intraday trading. Looking further across the numbers, in just five days, the Sensex has gained over 4,700 points, and the Nifty 50 has risen by more than 6%. This rally is partly fuelled by domestic economic data, including a dip in retail inflation to its lowest point in over six years (3.34% in March).
Here’s why the market is rallying and what’s making it all happen.
Banking stocks lead the charge
The banking sector is the star of the show today. The Nifty Bank index surged by nearly 2%, with key banks like HDFC Bank, ICICI Bank, and Axis Bank leading the charge. Furthermore, the eagerly awaiting the banks Q4 earnings by investors also adds an optimism to the rally, which are due on April 19, and this anticipation has driven their stock prices higher.
Foreign investors are back
Foreign institutional investors (FIIs) have made a big return to the Indian market. For the second consecutive day, FIIs have bought Indian stocks worth nearly Rs 10,000 crore.
US-Japan trade talks
Trade talks between the US and Japan have added another positive development. As US President Donald Trump joins the discussions, there is also a hope that India could benefit from stronger trade ties with the US. With ongoing global trade tensions, India is seen as a key ally, and if favorable deals come through, it could boost India’s market.
A weaker dollar supports Indian markets
A weaker US dollar is another big reason behind the market surge. The dollar index dropped to 99.56 from 109.88 earlier this year, which is good news for emerging markets like India. A weaker dollar often leads to more foreign investments and helps support the Indian rupee.
Crude oil prices
Global oil prices are remaining stable. With Brent crude hovering around $66 per barrel, it eases inflationary pressures. Since India imports most of its oil, lower oil prices help reduce costs, which in turn supports the economy.