MUMBAI: India’s equity markets witnessed a powerful rebound this week, with the benchmark BSE Sensex surging 4,650 points and the NSE Nifty climbing 1,430 points over just four trading sessions. Both indices registered gains of over 6%, marking one of the strongest recoveries in recent months.
The rally was particularly pronounced in a holiday-shortened week, with the market posting its biggest weekly gain in more than two years. The Sensex, Nifty, and Midcap index each rose over 4%, driven by a combination of global and domestic factors.
Investor sentiment improved after US President Donald Trump announced exemptions from certain tariffs, easing trade war concerns. Additionally, forecasts of an above-average monsoon and expectations of further interest rate cuts by the Reserve Bank of India (RBI) boosted market confidence. Falling crude oil prices also provided relief, benefiting India’s import-dependent economy.
Anand K. Rathi, Co-Founder of MIRA Money attributed the rally to multiple factors, including the postponement of US tariffs, declining inflation, and lower crude oil prices. He noted that inflation had dropped to its lowest level in nearly six years, which could increase disposable income and support corporate earnings growth.
Rathi also highlighted the potential for India to negotiate favorable trade deals, similar to those secured by Japan and South Korea, which could further strengthen market sentiment. However, he cautioned that sustained growth would depend on a rebound in corporate earnings, likely from the first quarter of FY26.
On Thursday, the Sensex closed at 78,553.20, up 1,508 points (1.96%), while the Nifty ended at 23,851.65, gaining 414 points (1.77%). All sectoral indices closed in positive territory, with telecom, PSU banks, oil & gas, pharma, and auto stocks leading the gains. Major gainers in the Nifty50 pack included Bharti Airtel, ICICI Bank, Bajaj Finance, and Sun Pharma.
Vinod Nair, Head of Research, Geojit Investments said that a strong rally in large-cap stocks was observed today, primarily driven by financials, amid expectations of improved margins stemming from changes in savings deposit interest rates.
“Positive sentiment was further supported by a reversal in FII flows, although the sustainability of this trend remains uncertain. Nonetheless, optimism surrounding the domestic market persists, bolstered by the expectation of a favourable outcome from US-India trade negotiations and a relatively minimal disruption from the US-China trade tensions. Additionally, a moderating inflation trajectory towards more comfortable levels is further enhancing market sentiment,” stated Nair.