The BSE Sensex surged over 950 points, above 77,800 level. Meanwhile, the Nifty50 was back above the 23,600 mark around 11:36 am.
The total market capitalisation of all BSE-listed companies jumped by Rs 4 lakh crore to Rs 417.3 lakh crore.
Heavyweight financials advanced 1.4%, led by Kotak Mahindra Bank, which jumped 2.6% to its highest level since October 2021.
The energy index gained 1.5%, with GAIL and Gujarat State Petronet rising 5% and 2.5%, respectively, on likely benefits from proposed amendments in gas transmission tariff regulations. Shares of Indraprastha Gas also climbed 3%.
Why is the stock market rising today?
1) FII buying returns
After months of persistent selling, Foreign Institutional Investors (FIIs) have turned net buyers in three of the last four sessions, lifting market sentiment. On March 21, FIIs purchased Rs 7,470 crore worth of equities, marking a shift in their stance.”Recent activity shows a change in FII strategy in India. The intensity of FII selling had started declining earlier. The recent reversal in FII selling has turned the market sentiments for the better, facilitating a rally in the market,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investment Services.
2) Improving domestic macros
The rally in Indian markets comes despite global concerns over potential U.S. tariffs taking effect from April 2. Strong domestic economic fundamentals and fair valuations have encouraged FIIs to shift from sellers to buyers. This, in turn, has triggered significant short covering, leading to sharp price spikes.
“The uncanny ability of the market to surprise was evident last week when the Nifty surged by 4.6% in a week. This happened despite global markets being jittery over fears of Trump’s reciprocal tariffs. Improving macros of the Indian economy and fair valuations have turned FIIs into buyers, triggering massive short covering. Even though the undertone of the market is bullish investors have to be careful. April 2nd- the reciprocal tariffs day- is looming large and the uncertainty surrounding that is huge,” said Vijayakumar.
3) Declining U.S. Treasury yields
A drop in U.S. Treasury yields has further supported Indian equities. The 10-year U.S. Treasury yield has declined nearly 40 basis points from its mid-February highs, settling at 4.27%. Lower yields make emerging markets like India more attractive, prompting investors to shift funds away from U.S. stocks.
4) Technical indicator
Strong technical indicators have further reinforced bullish momentum in the market. The Nifty formed a robust white-body Marubozu candle on the weekly chart, nearly recovering all February losses. The index also broke key resistance levels, closing above the 20DEMA, 50DEMA, and 89DEMA in a single week.
According to Angel One, Nifty has decisively broken out of a Falling Channel pattern, signaling a shift in trend. Additionally, RSI Smoothened has crossed its previous swing high of 60, aligning with the price breakout at 23,800. This momentum, coupled with a fresh buy crossover on the weekly timeframe, suggests the next potential targets are 23,800 and 24,000, aligning with the 200DSMA.
However, Angel One notes that the next leg of the rally may be slower, with potential choppy or consolidative moves. Traders are advised to maintain a positive bias, using dips as buying opportunities, while 23,200 and 23,000 serve as strong support levels.
