Sensex soars 1,000 pts, Nifty erases all losses for 2025; surging bank shares, other key factors behind market rally

1) Easing Foreign Selling: Foreign portfolio investors (FPIs) pumped in Rs 7,470.36 crore on Friday, largely due to the FTSE March review. The FII reversal helped lift investor sentiment that had been dented by sustained foreign fund selling since October last year. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that a reversal in FPI selling has strengthened market confidence. He attributed this shift to robust domestic growth, easing inflation and a weaker dollar.

2) Rupee Strengthens Against Dollar: The Indian rupee appreciated 12 paise to 85.86 against the US dollar on Monday, aided by strong domestic inflows. Despite global uncertainties, the weakening dollar provided additional support.

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3) Positive Global Cues: Wall Street’s performance also lifted domestic sentiment. U.S. stock futures rose as investors assessed potential tariff measures by President Donald Trump. At around 10 AM, the Dow Futures were trading 0.47 percent higher. Trump is expected to take a selective approach, focusing on countries with significant trade surpluses with the US.

On Friday, the S&P 500 gained 0.1 percent to close at 5,667.56, while the Dow Jones Industrial Average edged up 0.1 percent to 41,985.35. The Nasdaq Composite rose 0.5 percent to 17,784.05. Investors remain watchful of the April 2 deadline for potential tariff actions.

4) Banking Stocks Lead Gains: Banking shares were the highlight of the session, with the Nifty Bank index surging a whopping 1,000 points to touch an intraday high of 51,635. Kotak Mahindra Bank, Canara Bank, and Punjab National Bank were among the top gainers, rising over 3 percent. Kotak Mahindra Bank emerged as the top performer in the Nifty Bank index. Nifty Bank has rebounded sharply and is now just 5-6 percent away from its all-time high of 54,500.

Hardik Matalia, Derivative Analyst at Choice Broking, said, "The index sustained above 50,500 and closed at 50,593.55, holding above key moving averages (20, 50, and 200-day EMAs). As long as it stays above these levels, sentiment remains bullish. Resistance is seen at 51,000 and 51,750, while support lies at 50,000 and 49,700, with 49,000 acting as a crucial breakdown level."

5) Improving Investor Sentiments: According to Bloomberg, Trump officials have acknowledged the list of target countries may not be universal, and that other existing tariffs, like on steel, may not necessarily be cumulative, which would substantially lower the tariff hit to those sectors.
Last week, the BSE benchmark gauge surged 3,076.6 points or 4.16 percent, and the Nifty jumped 953.2 points or 4.25 percent. "We expect this upward momentum to continue, on the back of foreign institutional investors' return to the Indian market amid attractive valuations and signs of economic recovery," Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

Technical Outlook:

Anand James, Chief Market Strategist at Geojit Financial Services, said, “Nifty has nearly completed the first leg of the 23,450-23,807 move set last week. The index is now trading above the upper Bollinger Band for the third consecutive session. However, 60 per cent of Nifty 50 stocks are yet to trade above their upper bands, indicating scope for new leadership to emerge in the rally.”

He added that failure to push beyond the 23,450-23,500 zone or a close below 23,300 could trigger a downside move towards 23,160.

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