Sensex tops 80K mark, Nifty above 24,250; 5 factors behind today's rally

Indian benchmark indices Sensex and Nifty surged on Monday, driven by better-than-expected earnings from Reliance Industries and positive cues from Asian markets, with investors closely monitoring tensions between India and Pakistan.

The BSE Sensex rose over 800 points, or 1%, to reclaim the 80,000 level, while the Nifty50 gained over 200 points, to trade 24,250 level around 10:42 am.

Barring Nifty IT, all sectoral indices traded in the green, with the Nifty PSU Bank, Consumer Durables, Oil & Gas, and Private Bank indices surging over 1%.

The market capitalisation of all listed companies on BSE surged by Rs 2.9 lakh crore to Rs 424.46 lakh crore.

Here are top reasons behind today's market rally:

1) Better than expected RIL Q4 results
Reliance Industries rose 4% after reporting a fourth-quarter profit that exceeded estimates, driven by strong performances in its retail and digital businesses. Reliance's performance alone contributed nearly 300 points to the Sensex rally.

Brokerage firm Nomura highlighted robust results across segments and identified three near-term triggers: scaling up the new energy business, potential tariff hikes for Jio, and a possible IPO or listing for Jio that could unlock further value for Reliance.

JP Morgan also indicated that Reliance shares could rise in the near term due to attractive valuations.

2) Sustained FII buying
A major contributor to market resilience is the sustained buying by Foreign Institutional Investors (FIIs), which has amounted to Rs 32,465 crore over the last eight days.

"FIIs have dramatically reversed their selling strategy and turned sustained buyers. This shift is driven by the relative underperformance of US stocks, bonds, and the dollar. In a weakening US economy and depreciating dollar environment, FIIs may continue to buy, providing further support to the market," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.

3) Weakening Dollar
A falling dollar has also bolstered investor sentiment in emerging markets like India. A weaker dollar typically encourages foreign inflows and supports the rupee.

On Monday, the dollar index stood at 99.60, down from 109.88 in early February. This decline has lifted appetite for risk assets, particularly in sectors like metals that are sensitive to currency movements.

4) Crude Impact
Crude oil prices traded below $67 a barrel on Monday, easing inflation concerns. Brent crude was around $66.06, while U.S. West Texas Intermediate was at $63.34. Lower oil prices are favorable for India, a major oil importer, helping ease pressure on the current account and inflation.

5) Global Market
Indian indices also surged in line with other Asian peers. Early market action was light, with MSCI's broadest index of Asia-Pacific shares outside Japan edging up 0.1%. Japan's Nikkei rose 0.9%, while South Korea firmed 0.2%.

EUROSTOXX 50 futures added 0.3%, while FTSE futures and DAX futures both rose 0.2%.

Meanwhile, U.S. President Donald Trump has claimed progress in trade negotiations with China and other countries, though tangible evidence remains scarce.

"It is important to remember that markets have an uncanny ability to surprise by climbing many walls of worries," said Vijayakumar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)