India's equity market witnessed one of its most remarkable rallies on Monday, with the benchmark indices - BSE Sensex and NSE Nifty - surging nearly 4% each amid improved investor sentiment. The rally was primarily fueled by easing geopolitical tensions between India and Pakistan as the nations announced a ceasefire to avoid further escalation. Further, the US and China coming to a trade deal provided a big boost as it eased global trade tensions.
BSE Sensex skyrocketed 2,975 points or 3:74% to settle at 82,430, and the Nifty50 surged as much as 917 points or 3.81% to close the session at 24,925. The broader market also participated in the rally, with the Nifty MidCap index and small-cap index gaining over 4% each.
The rally made investors richer by more than Rs 16 lakh crore as the overall market capitalisation of all companies listed on the BSE grew to Rs 432.47 lakh crore today. The figure stood at Rs 416.40 lakh crore on Friday.
All the sectoral indices closed in the green with realty, power, IT, and energy up 4-6%. The biggest gainers in the Nifty pack included Infosys, Adani Enterprises, Shriram Finance, Trent and HCL Technologies.
“Confluence of positive geopolitical and economic developments—the ceasefire between India and Pakistan, coupled with a breakthrough trade agreement between the US and China—sparked the strongest daily market rally in recent times,” said Vinod Nair, Head of Research, Geojit Investments Limited.
The US and China on Monday announced a 90-day suspension of part of their tariffs. As per the Joint Statement shared by both countries, the US will be cutting tariffs on Chinese goods to 30% from 145% for a period of 90 days. China has also announced that it will be bringing down the tariffs on US goods to 10% for a 90-day period.
Nair added that while the momentum remains strong, the market may enter a phase of consolidation in the near term as investors await concrete signs of earnings growth.
Ajit Mishra – SVP, Research, Religare Broking said that technically, the sharp rise in the Nifty marks a continuation of the uptrend following a three-week consolidation phase. “Having crossed the previous swing high of around 24,857, the index is now poised to inch towards the 25,200 level, while the 24,400–24,600 zone is expected to offer strong support on any dip,” added Mishra.