Sensex Jumps 1,000 Points, Nifty Recovers All 2025 Losses; Bank Shares and Key Factors Drive Market Rally

Equity benchmark indices Sensex and Nifty maintained their growth on Monday, the sixth session of gains in a row. Both indices gained more than 1 percent due to a rise in foreign fund inflows and aggressive buying in bank stocks.

At 12:30 pm, the Sensex stood at 1,011.29 points, or 1.31%, higher at 77,916.80, while the Nifty was higher by 297.45 points, or 1.27%, at 23,647.85. The market breadth was positive, with 2,579 stocks rising, 904 falling, and 147 stock price remaining unchanged.

Notable winners in the market were Kotak Mahindra Bank, Power Grid, Larsen & Toubro, Axis Bank, and SBI Life Insurance, which gained up to 3% intraday.

The rally was supported by a number of key reasons:

Relaxation in Foreign Selling: FPIs brought ₹7,470.36 crore into the market on Friday, primarily driven by the FTSE March review. This FPI selling reversal stabilized investor confidence, which had been eroded by sustained foreign fund outflows since October 2023. V K Vijayakumar, Chief Investment Strategist of Geojit Financial Services, pointed out that strong domestic growth, softening inflation, and a weakening dollar were behind this turnabout.
Rupee Strengthening: Indian rupee strengthened 12 paise to 85.86 against the US currency on Monday. It was boosted by robust domestic inflows and the weakening dollar, which offered further support in the face of global uncertainties.
Positive Global Sentiment: US futures rallied, lifting local sentiment. Dow Futures increased by 0.47% as investors waited for possible tariff actions by President Donald Trump. S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all gained moderately as investors monitored the April 2 deadline for possible tariff action.
Bank Stocks Are Leading the Rally: Bank stocks led the rally, with Nifty Bank index rising by 1,000 points to a high of 51,635 in intraday trade. Top gainers were Kotak Mahindra Bank, Canara Bank, and Punjab National Bank, which gained more than 3% each. The Nifty Bank index has now staged a sharp recovery and is only 5-6% away from its all-time high of 54,500. For as long as the index is above crucial moving averages, the index is bullish, according to Hardik Matalia, Derivative Analyst at Choice Broking, with resistance levels of 51,000 and 51,750, and supports of 50,000 and 49,700.
Better Investor Mood: Bloomberg states that US authorities have made it clear that the list of countries subject to tariffs may not be comprehensive, and the tariffs that currently exist, like those on steel, are not cumulative, which would decrease the overall tariff burden. The BSE benchmark last week jumped 4.16%, while the Nifty rose 4.25%. Siddhartha Khemka, Motilal Oswal Financial Services' Head of Research, anticipates the momentum to sustain itself in terms of foreign institutional investors returning and an improvement in the economy.

Technical Outlook:

Anand James, Chief Market Strategist at Geojit Financial Services, pointed out that the Nifty had almost finished the first leg of its movement within the range of 23,450 and 23,807. The index is currently trading above the upper Bollinger Band for the third session in a row.

Yet, with 60% of Nifty 50 stocks below their upper bands, there is still scope for new leadership to come in on the rally. Failure to move past the 23,450-23,500 range or a close below 23,300 could initiate a pullback to 23,160.