Why stock market rose today? Sensex surges 1,509 pts; Nifty breaches 23,800; 6 key factors behind today's rally

Indian benchmark indices extended their winning streak for the fourth straight session on Thursday, with the BSE Sensex soaring over 1,500 points and the Nifty50 closing above 23,850. The rally was driven by strong buying in financial stocks, even as concerns lingered over U.S. tariff policies and a global economic slowdown.

The 30-share BSE Sensex surged 1,509 points or 1.96% to settle at 78,553, while the broader NSE Nifty gained 414 points or 1.77%, ending at 23,851.

The total market capitalisation of BSE-listed companies jumped by Rs 4.33 lakh crore to Rs 419.33 lakh crore.

Key factors behind today's rally:

1) Rally in banking stocks

Bank Nifty led the rally, climbing nearly 2.2%, driven by gains in heavyweight financials like HDFC Bank and ICICI Bank. These gains came ahead of their Q4 earnings, scheduled for April 19.

HDFC Bank, ICICI Bank, Axis Bank, SBI and Kotak Mahindra Bank together contributed 730 points to the Sensex’s 1,500-point surge.

2) FIIs buying

Foreign Institutional Investors (FIIs) remained net buyers for the second consecutive day, purchasing equities worth Rs 3,936 crore on Wednesday. In just two days, total FII inflows have crossed Rs 10,000 crore, signalling strong confidence in Indian equities.

“FIIs have turned buyers in India as the prospects for the US and China appear weakest in the current crisis. FIIs are likely to continue buying high-quality large caps in domestic consumption sectors,” said Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

3) Trade talk between Japan and US

Asian markets rose as traders assessed ongoing trade negotiations between the U.S. and Japan, even as uncertainties surrounding tariffs imposed by President Donald Trump kept sentiment fragile.

Japan's Nikkei gained 1.35%, while the yen weakened as Japan kicked off talks with the U.S. Trump, who unexpectedly joined the negotiations, declared "big progress" in discussions with lead Japanese negotiator Ryosei Akazawa.

“The U.S. regards India as one of four key allies—along with the UK, Japan, and South Korea—with whom it will strike trade deals first. If this materializes, India stands to benefit from the ongoing trade war between the U.S. and China,” said Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

4) Weakening Dollar

A falling dollar has boosted investor sentiment in emerging markets like India. A weaker dollar typically encourages foreign inflows and supports the rupee.

On Thursday, the dollar index stood at 99.57, down from 109.88 in early February. This helped lift appetite for risk assets, especially in sectors like metals that are sensitive to currency movements.

5) U.S. tariff exemptions still supporting sentiment

Investor sentiment continues to benefit from U.S. President Donald Trump's earlier decision to postpone additional tariffs on 75 countries, including India, until July 9. The temporary relief, announced earlier this week, came as a breather amid rising global trade tensions. While the move initially triggered a relief rally in global equities, its impact remains supportive for Indian markets.

6) Crude Impact

Oil prices traded near $66 a barrel on Thursday, helping ease inflation concerns. Brent crude hovered around $66.46, while U.S. West Texas Intermediate (WTI) stood at $63.2. Lower crude prices are positive for India, which imports the majority of its oil, as they help reduce pressure on both the current account and inflation.