Sensex surges 500 points: What's driving today's stock market rally?
What's the story
India's benchmark stock indices opened on a positive note today, with the Sensex rising by over 500 points. The rally is being driven by favorable global cues, a stronger rupee, and foreign institutional investors (FIIs) buying into the market. At 11:55am, the Sensex was trading at around 85,430 after gaining 500 points while NSE Nifty50 climbed by 175 points to reach 26,142.
Rally potential
Market poised for year-end rally
Market participants are increasingly betting on a year-end rally, bolstered by a turnaround in key macro indicators. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said two developments could accelerate this upmove. "It appears that the market is heading for a year-end rally," he said. "A sharp reversal in the rupee and foreign institutional investors turning buyers in the cash market are mutually reinforcing factors."
Market support
Domestic macroeconomic environment supports equities
Vijayakumar also highlighted India's favorable domestic macroeconomic environment and the potential uptrend in earnings growth as fundamental support to equities. However, he cautioned that elevated valuations could limit the pace of the rally and keep bullish sentiment in check. From a technical standpoint, Anand James, Chief Market Strategist at Geojit Investments, said Nifty is now better positioned for an upward move after weeks of pressure.
Market strategy
Nifty's potential upward move
James noted that Nifty has been on a declining trendline for three weeks but is now better poised to stage an upmove. He observed that recent declines were held just above last week's low, indicating a possible bottom formation. This opens up room for an initial move toward 26,300. However, if the index fails to hold above 25,980, markets could slip into sideways consolidation with downside targets seen in the 25,300-25,130 range.
Market observation
Investors closely tracking currency movements and FII flows
For now, the market sentiment remains constructive with investors closely watching currency movements, FII flows, and global cues for further direction. FIIs turned buyers for the third straight session on Friday, buying ₹1,830.89 crore which further boosted the sentiment. Traders are betting that the US Federal Reserve will cut interest rates twice in 2026 after last week's economic data failed to provide clarity on the outlook.