NEW DELHI: India's equity market witnessed a strong relief rally on Monday, with the benchmark indices- the BSE Sensex and the NSE Nifty- both surging more than 3% each amid improved investor sentiment. The rally was primarily fueled by easing geopolitical tensions between India and Pakistan as both sides agreed to avoid further escalation. Further, reports of the US and China agreeing it a trade deal provided support as it eased global trade tensions.
BSE Sensex skyrocketed 2400 points to an intraday peak of 81,831, and the Nifty50 surged as much as 840 points to touch a high of 24,738. The broader market also participated in the rally, with the Nifty MidCap index and small-cap indices gaining about 3% each.
The sharp rebound comes after recent market volatility as investors cheered the reduction in war related risks between Indian ams Pakistan, and renewed optimism in global trade.
"The ceasefire between India and Pakistan has paved the way for a sharp rally in the market. The prime mover of the rally will be the FII buying which has been sustained for sixteen continuous days except last Friday when the conflict escalated. Domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
He added, “There are rumors of impending US deal with China on trade but details are yet to come. If a deal materializes that would be good for the global economy. But from an Indian perspective that would be slightly disappointing since we were expecting a trade deal with the US ahead of many nations including China."
Devarsh Vakil, Head of Prime Research at HDFC Securities said that the trade deal announcement between US and UK and reports that U.S. and Chinese officials meeting in Switzerland on the weekend for trade discussions, paved the way for broader negotiations and tariff de-escalation, supported investor sentiment.
“President Trump has announced that he will sign an executive order Monday aiming to lower medication costs. The directive would instruct HHS to benchmark Medicare payments for physician-administered drugs against the lowest international prices. If implemented, this policy would significantly reduce revenue for US pharmaceutical companies and their Indian suppliers. Indian pharmaceutical exporters will take a hit in today's trading session,” added Vakil.
He added, “There are rumors of impending US deal with China on trade but details are yet to come. If a deal materializes that would be good for the global economy. But from an Indian perspective that would be slightly disappointing since we were expecting a trade deal with the US ahead of many nations including China."
Devarsh Vakil, Head of Prime Research at HDFC Securities said that the trade deal announcement between US and UK and reports that U.S. and Chinese officials meeting in Switzerland on the weekend for trade discussions, paved the way for broader negotiations and tariff de-escalation, supported investor sentiment.
“President Trump has announced that he will sign an executive order Monday aiming to lower medication costs. The directive would instruct HHS to benchmark Medicare payments for physician-administered drugs against the lowest international prices. If implemented, this policy would significantly reduce revenue for US pharmaceutical companies and their Indian suppliers. Indian pharmaceutical exporters will take a hit in today's trading session,” added Vakil.