Sensex Surges 800 Points, Nifty 50 Reclaims 24,200: Why the Share Market is Rising?

On Monday, April 28, the Indian stock market witnessed significant gains with both Sensex and Nifty 50 climbing nearly 1% each. The Sensex surged by over 850 points, reaching 80,089 during the session, while Nifty 50 gained nearly 250 points, reclaiming the level of 24,283. 

As the market continued to rise, the BSE Midcap and Smallcap indices also saw a 1% increase. The total market capitalisation of all firms listed on the BSE grew by ₹3 lakh crore, reaching approximately ₹425 lakh crore, making share market investors richer by about ₹3 lakh crore in a single day.

Here are 5 key reasons driving the upward movement in the Indian stock market:

India’s Diplomatic Response After Pahalgam Terror Attack

Although tensions between India and Pakistan escalated following the terror attack in Pahalgam, the Indian government has responded with restraint, avoiding an aggressive military retaliation. This diplomatic approach has been noted by the market as a sign of stability. 

Furthermore, the international community, including the United States, has condemned the attack and pledged support in the fight against terrorism. The US State Department also emphasised that both India and Pakistan should work toward a responsible solution. While uncertainties remain regarding the future, the market has not factored in the possibility of extreme outcomes, such as war. 

Read More, RBL Bank’s Share Price Jumps 6% Post Q4 FY25 Earnings: Know What’s Driving the Rally. 

Easing of Trade War Jitters

The ongoing trade tensions between the US and China have been a concern for global markets. However, reports indicate that both countries are actively negotiating to finalise a favourable trade deal. US President Donald Trump confirmed that the administration is in talks with China for an agreement that could resolve some of the trade disputes. Although Trump stated that tariffs would not be reduced without significant concessions from China, the market has responded positively to the easing of trade war fears. 

Foreign Portfolio Investors (FPIs) Buying Indian Stocks

Foreign Portfolio Investors (FPIs) have been actively buying Indian equities since mid-April, which has significantly bolstered market sentiment. Amid concerns over the slowing US economy and the weakening US dollar, Indian markets have become an attractive investment destination. In just 8 days, FPIs have invested ₹32,465 crore in Indian stocks, marking a sharp reversal from their previous selling strategy. 

Strong Performance of Reliance and Banking Stocks

The performance of major stocks like Reliance Industries and top banking stocks has also played a pivotal role in driving the market higher. Reliance Industries saw its share price rise by more than 3% after it reported a 6% year-on-year increase in consolidated profit for the March quarter (Q4FY25). 

In addition, the banking sector has performed well, with banks such as ICICI Bank, HDFC Bank, and Axis Bank reporting better-than-expected earnings for Q4. These positive results from key sectors like banking and energy have provided much-needed support to the overall market.

Positive Market Sentiment 

The medium to long-term outlook for India’s economy remains positive due to a favourable macroeconomic environment, including expectations of a normal monsoon season. Investors are optimistic about the growth prospects in sectors such as healthcare, the digital ecosystem, electronics manufacturing, capital goods, and defence. Furthermore, India’s relatively lower dependence on external trade compared to other economies adds to its appeal as an investment destination.

Conclusion

The Indian stock market’s recent surge can be attributed to a combination of positive global and domestic factors. India’s diplomatic handling of international tensions, easing trade war fears, continued buying by foreign investors, strong performances from key companies, and a positive long-term outlook for India’s economy have all contributed to boosting investor confidence. With these factors in play, the market continues to show resilience, and the outlook for the future remains optimistic.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.                          

Investments in securities market are subject to market risks, read all the related documents carefully before investing.