Why Did Market Rise Today? Key Reasons Behind Sensex Rallying 2,975 points, Nifty Above 24,900
India's Nifty 50 jumps 3.7%, marking its biggest single-day gain since Feb 2021 as easing India-Pakistan tensions boost market sentiment.
Why Is Market Rising Today? Indian benchmark equity indices BSE Sensex and Nifty50 opened higher on Monday, amid improving global cues after India and Pakistan came to an understanding over simmering tensions, while the US and China made progress on their trade deal discussions.
The BSE Sensex jumped 2,975.43, or 3.74%, to close at 82,429.90, while the Nifty 50 surged 916.70 points, or 3.82%, to close at 24,924.70.
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At Day’s High
The BSE Sensex soared 2,905 points, or 3.66%, to hit a high of 82,360.43, while the Nifty50 rallied 899 points, or 3.7%, to touch 24,907 on Monday — its biggest intraday gain since February 2021. The sharp rally was fueled by de-escalating tensions between India and Pakistan and positive global cues, which lifted investor sentiment across the board.
This surge in market optimism drove the total market capitalisation of all BSE-listed companies up by a staggering Rs 14 lakh crore, marking the largest single-day jump since May 2022.
The ceasefire between India and Pakistan remained intact on Saturday, following intense overnight exchanges between the two nuclear-armed neighbours. This marked the most serious military confrontation in nearly 30 years.
The escalation began on Wednesday when India launched strikes on nine terror camps in Pakistan in retaliation for a deadly attack in Kashmir that killed 26 civilians.
However, tensions persisted as Indian military officials reportedly issued a hotline communication to their Pakistani counterparts on Sunday, raising concerns over fresh ceasefire violations and warning of a potential response if provocations continued.
After market opening on Monday, barring Sun Pharma, all Sensex constituents were trading higher. Adani Ports & SEZ, Bajaj Finance, Axis Bank, Eternal, and Power Grid were the top gainers.
Among the sectoral indices, except for pharma and healthcare, all other sectors, including Nifty auto, bank, energy, IT, metal, realty, and consumer durables, rose by 4.72 per cent.
In the broader markets, the BSE Midcap index rose 2.59 per cent and the BSE Smallcap index gained 3.10 per cent.
Why Is the Stock Market Rising Today?
India-Pakistan Ceasefire
Investor sentiment surged on Monday, buoyed by signs of de-escalation between India and Pakistan after a tense period marked by missile and drone strikes across the border. According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., while the easing of tensions provided temporary relief, caution remains.
“A thaw in India-Pakistan relations is expected to trigger a sharp rebound in Nifty during early Monday trades," said Tapse. However, he warned that “any renewed violations of the ceasefire by Pakistan could dampen bullish momentum."
US-China Trade Deal Optimism
Tapse also cited improving US-China trade dynamics as a key driver of global optimism. In the near term, he sees Nifty heading toward the 24,237–24,447 range, with potential upside targets of 24,750–24,860 if momentum sustains.
Meanwhile, Devarsh Vakil, Head of Prime Research at HDFC Securities, emphasized India’s underlying macroeconomic strength. He credited the country’s domestic consumption-led growth and policy stability for its ability to absorb global shocks.
“India’s markets and economy have shown exceptional resilience, repeatedly withstanding external disruptions," Vakil said. “This is driven by a fundamentally strong, inward-focused economy that consistently emerges stronger from crises."
Foreign Investors Return: India Back in Global Favour
After a prolonged period of caution, foreign portfolio investors (FPIs) are making a strong comeback to Indian equities. Since mid-April, foreign institutional investors (FIIs) have poured $5.8 billion into Indian markets—marking four consecutive weeks of positive inflows.
India now ranks among the top emerging markets for FPI interest, alongside Taiwan and Brazil. This isn’t merely a temporary bounce. A larger global reallocation is underway, as investors diversify away from dollar-dominated US assets in search of growth and stability in emerging markets—where India stands out.
In just the past week, India recorded net inflows of $326 million, following a stellar $724 million the previous week. Notably, $257 million flowed directly into India-focused funds, as highlighted in Elara Capital’s Global Liquidity Tracker Report.
Adding to the momentum, global investment desks are increasingly shifting capital out of China and into India, citing stronger fundamentals and policy consistency. With domestic institutional flows also holding firm, this renewed FPI interest could gain further traction in the months ahead.
Vakil also highlighted India’s efforts to forge new trade partnerships and diversify global alliances as key to enhancing its investment appeal.
“Steady foreign inflows, robust business potential, and balanced global relationships are reinforcing India’s position as a relatively stable destination for investors," he noted.
Investor mood was further lifted by Morningstar DBRS upgrading India’s sovereign credit rating to BBB (Stable) from BBB (Low) — a move seen as an endorsement of the country’s macroeconomic stability.
“This credit upgrade adds to the bullish sentiment and supports a sharp rebound in markets," Vakil added.
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