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Sensex surges 1,000 pts, 7 key factors behind market rally
Sensex, Nifty extended rise after US officials said Beijing could use its close economic ties with Tehran to press Iran to reopen the Strait or Hormuz.
The benchmark equity indices Sensex and Nifty soared on Thursday, supported by value buying, easing volatility and positive global market trends amid optimism surrounding the ongoing US-China talks.
At 1:38 pm, the Sensex was up 1,038.91 points or 1.39% at 75,647.89, and the Nifty was up 347.05 points or 1.48% at 23,759.65. About 1,871 shares advanced, 1,876 shares declined, and 138 shares were unchanged.
Key factors behind market rise
1) Value buying: Investors continued to buy beaten-down stocks after recent sharp losses in the market. The Sensex and Nifty had ended marginally higher on Wednesday after falling nearly 4 percent in the previous four sessions due to rising crude oil prices and concerns following Prime Minister Narendra Modi’s austerity call.
Analysts, however, said the rebound reflects “oversold” market conditions rather than a decisive shift in the mood.
“The final leg of the earnings season and selective policy tailwinds provide stock- and sector-specific support for the markets, but the overall sentiment remains fragile due to elevated crude prices,” Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services told Reuters.
2) Decline in volatility: The India VIX, considered the market’s fear gauge, declined 4 percent to 18.66. A fall in the volatility index generally indicates easing nervousness among investors and improves risk appetite in equities, helping markets trade with a positive bias.
Stock Market Live Updates
3) Firm global cues: Asian markets traded higher on Thursday. Tokyo’s Nikkei 225 index rose 0.3 percent to 63,448.87 after briefly touching another intraday record high above 63,700, supported by strong corporate earnings.
South Korea’s Kospi gained 0.5 percent to 7,884.71, aided by technology stocks. Hong Kong’s Hang Seng advanced 0.7 percent to 26,584.88, while Taiwan’s Taiex climbed 0.6 percent.
On Wednesday, technology shares led gains on Wall Street. The S&P 500 climbed 0.6 percent to 7,444.25 and hit another record high. The Dow Jones Industrial Average slipped 0.1 percent to 49,693.20, while the Nasdaq Composite rose 1.2 percent to 26,402.34 and touched a fresh peak.
“Global equities advanced following a largely upbeat session on Wall Street, as investors overlooked elevated Producer Price Index (PPI) data and continued buying in technology and communication stocks,” Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Ltd, said.
4) Optimism around US-China talks: Investor sentiment remained supported by optimism surrounding the ongoing talks between the US and China.
Oil prices traded higher amid continuing tensions linked to the Iran conflict, with investors hoping the Trump-Xi meeting could bring results, after US officials said Beijing could use its close economic ties with Tehran to press Iran to reopen the Strait or Hormuz, reported AP.
Chinese President Xi Jinping on Thursday said 2026 would be a “historic, landmark year” for China-US relations as he welcomed US President Donald Trump for talks at the Great Hall of the People.
The leaders of the world’s two largest economies are scheduled to hold multiple rounds of discussions on Thursday and Friday.
Trump’s visit comes amid rising geopolitical and economic uncertainties triggered by conflicts in the West Asia region and concerns over global energy supplies.
5) Earnings boost: Telecom operator Bharti Airtel advanced 3 percent after reporting higher quarterly profit, helped by users moving to costlier plans and strength in its Africa business. State-owned explorer Oil India rose 2.4 percent on higher quarterly profit.
6) Sensex expiry: Thursday’s weekly expiry of Sensex derivatives contracts also added to market volatility. On expiry days, traders either square off or roll over positions in the futures and options segment, resulting in sharp intraday market movements.
7) Govt may reduce taxes on bond investments by foreigners: Centre is considering a significant reduction in the taxes paid by foreign investors on the country’s bonds as authorities seek to align policies with global norms and attract inflows, Bloomberg News reported on Thursday.
The move, recommended by the Reserve Bank of India, is being seriously considered by the Finance Ministry as authorities seek to curb the rupee’s depreciation, the report said, citing sources familiar with the matter.
Technical Outlook
Anand James, Chief Market Strategist at Geojit Investments, said two consecutive closes below the lower Bollinger Band and a suspected morning star candlestick formation indicate the possibility of continuation of Wednesday’s recovery.
“We would require a push beyond 23,680 to confirm strength. Alternatively, a slip below 23,300 could expose 22,800 levels,” he said.
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Source : Money Control