Dalal Street started the week with a solid rally today, with the Sensex and Nifty climbing to their highest levels since January. The momentum in the stock market comes after weeks of caution. Today’s jump marks the fifth straight session of gains, turning the tide in favour of bulls once again.
At the time of writing at 12:30 pm, the Sensex was up over 1,000 points, crossing 79,570, while the Nifty rose nearly 330 points to touch 24,170.
The question is what’s driving this sudden surge? Here are three big reasons driving today’s stock market rally:
Banking stocks steal the show
The positive Q34FY25 earnings from heavyweights private lenders like HDFC Bank and ICICI Bank gave a significant boost to the markets, making banking the star performer.
With both stocks touching fresh record highs, banking became the standout sector for the day. HDFC Bank rose 1.3% and ICICI Bank gained nearly 1%, while others like Axis Bank, IndusInd, AU Bank, and IDFC First Bank surged between 2% and 5%. The Nifty PSU Bank and Private Bank indices jumped 2.5% and 2% respectively.
Foreign investors make a comeback
After weeks of steady outflows, foreign portfolio investors (FPIs) are finally turning positive on India again. In just the last three sessions, they have pumped over $1 billion into Indian equities. A weaker US dollar, combined with a stable rupee and optimism about India’s economic growth, seems to be pulling global investors back to Dalal Street.
Positive global cues and tariff optimism
There is also a growing belief that US-India trade talks may see progress within the 90-day window announced by the US administration. On top of that, US President Trump’s recent criticism of the Federal Reserve has kept the dollar under pressure, allowing Asian currencies including the rupee to strengthen.
India’s $5 Trillion club moment returns
After a brief pause, India is back in the elite $5 trillion market cap club. This is due to the sharp rally in both blue-chip giants and smaller stocks. This surge comes after nearly three months, the last time it happened was on January 5.
This puts India in an exclusive group of just five nations with stock markets valued above $5 trillion. The other nation include the US, China, Japan, and Hong Kong.