Why Is the Indian Stock Market Rising for 6th Straight Sessions?

The Indian stock market has been witnessing a strong rally over the past 6 consecutive sessions, with key indices making significant gains. On Monday, Nifty 50 opened in the green at 23,515 and quickly surged to an intraday high of 23,638. This marked an overall gain of 1,241 points or over 5.50% in the last six trading sessions.

Similarly, the BSE Sensex opened at 77,456 and reached a high of 77,874 within a few minutes of trading. In the last 6 sessions, Sensex recorded a gain of 4,046 points or 5.45%.

The banking sector also experienced strong buying momentum, with the Bank Nifty index opening at 50,982 and touching an intraday high of 51,769. Over the past 6 sessions, Bank Nifty has surged by 3,709 points, marking an impressive 7.70% gain.

Broader market indices outperformed the benchmark indices. The BSE Small-cap index surged by over 9.60%, while the BSE Mid-cap index gained more than 8.30% over the last six trading sessions.

As of 11:25 AM on Monday, 488 BSE-listed stocks had hit their circuit limits, with 297 stocks reaching the upper circuit and 191 stocks hitting the lower circuit. Additionally, 75 stocks touched their 52-week high, while 79 stocks hit their 52-week low.

Why Is the Indian Stock Market Rising?

Stock market experts have attributed the recent market rally to several key factors, including expectations of an RBI rate cut, improved Q4 2025 earnings outlook, stability in the Indian rupee, increased buying by both domestic and foreign institutional investors, and a strong economic outlook for India.

Top 5 Reasons Behind the Market Rally

1. Strong Q4 2025 Results Expected

Market analysts believe that the Indian economy is on a recovery path, which is expected to reflect in the upcoming Q4 2025 financial results.

Fitch Ratings has projected a rise in capital spending over the next 2 financial years (FY26 and FY27), which is expected to support economic expansion.

India’s GDP growth slowed to 5.4% in the July–September 2024 quarter but rebounded to 6.2% in the October–December 2024 quarter. This recovery trend has fueled expectations of strong Q4 results in 2025, boosting investor confidence.

2. RBI Rate Cut Buzz

After last week’s US Federal Reserve meeting, there is growing speculation that the Reserve Bank of India (RBI) will cut interest rates in its April 2025 policy review. The market is anticipating a rate cut, as lower interest rates would lead to increased liquidity, encouraging more investments.

Morgan Stanley has revised its projections and now expects the RBI to implement a cumulative 75 basis points (bps) rate cut, up from the previously estimated 50 bps reduction. The expectation of lower interest rates has strengthened investor sentiment, driving stock market gains.

3. Attractive Stock Valuations Encouraging Buying

Another significant reason for the market’s upward movement is the availability of high-quality stocks at attractive valuations.

Due to the recent market corrections, investors—both domestic institutional investors (DIIs) and foreign institutional investors (FIIs)—have been engaging in bottom-fishing.

DIIs have been net buyers in the cash segment, purchasing shares worth ₹30,788.19 crore last week. Although FIIs were net sellers earlier, they have now started buying again. Last week, FIIs purchased Indian shares worth ₹5,819.12 crore in the cash market.

4. Positive Economic Outlook for India

A recent report by Morgan Stanley has projected that India will become the world’s third-largest economy by 2028.

The report states that India’s GDP is expected to grow from $3.5 trillion to $4.7 trillion by 2026, making it the fourth-largest economy, behind the US, China, and Germany. By 2028, India is expected to surpass Germany and claim the third position.

Morgan Stanley also highlighted that declining inflation, primarily due to lower food prices, has created room for further rate cuts. It expects India’s consumer price index (CPI) inflation to average 4% in FY26, down from its previous forecast of 4.3%.

For the January–March 2025 quarter, CPI inflation is expected to average 4%, compared to the earlier estimate of 4.5%. Since the RBI targets a CPI range of 2-6%, this trend provides ample space for monetary policy easing, further supporting market optimism.

5. Stable Indian Rupee Boosting FIIs’ Confidence

A stable Indian rupee has played a crucial role in attracting foreign institutional investors back into the Indian stock market.

As the rupee stabilises, FIIs have started increasing their exposure to Indian stocks. Additionally, recent RBI policy measures, including a 25 bps rate cut, have further supported foreign investment inflows.

Stock Market Outlook

Despite the ongoing rally, market experts advise caution as certain global events could impact investor sentiment.

External factors such as the upcoming US tariff policy announcement on April 2 could influence global markets. As Indian markets resume trading on April 3, investors are advised to carefully analyse the situation before making major investment decisions.

Conclusion

The Indian stock market’s rally is fueled by expectations of a rate cut, strong economic indicators, and FII inflows. While the trend remains positive, investors should stay cautious of global risks and potential profit-booking.

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