Benchmark indices Nifty 50 and Sensex extended their winning rally to the sixth consecutive session, reclaiming one-month highs as the bulls took over the reins from the bears and exiting the correction phase. The Nifty 50 decisively topped the crucial 23,500 mark, while Sensex soared 900 points intraday.
With its gains, the Nifty 50 has exited the technical correction zone. Markets are said to be in a corrective phase when they fall 10 percent from their highs. However, with Nifty 50's current level of 23,658.30, the Nifty 50 is lower by 9.96 percent from its all-time high of 26,277.35, technically exiting the correction phase.
The Sensex index too, exited the correction phase, trading at 77,928.12, lower by 9.3 percent compared to its all-time high of 85,978.25.
At 1:24 pm, the Sensex was up 1,022.61 points or 1.33 percent at 77,928.12, and the Nifty was up 303.00 points or 1.30 percent at 23,653.40. About 2472 shares advanced, 1183 shares declined, and 128 shares unchanged, indicating the market breadth was in favour of the bulls.
The broader markets mildly outperformed the headline indices, with the Nifty Midcap 100 and Nifty Smallcap 100 indices soaring 1.3 and 1.2 percent respectively. In the sectoral space, 12 out of the 13 sectoral indices traded with sharp gains, barring Nifty Auto which traded flat with a negative bias.
Banking stocks led the rally, with Bank Nifty, Nifty Private Bank and Nifty PSU Bank indices soaring over two percent each. Kotak Mahindra Bank, Axis Bank, and SBI were among the top gainers across the Bank Nifty and Nifty 50 indices, as investors bought into the large-cap banking names, given reasonable valuations.
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The return for foreign portfolio investors to Indian equities is among the various factors driving the optimism. Last week saw aggressive short covering by FIIs in the index futures segment, further supporting the rise in the domestic benchmarks. However, 68 percent still remain on the short side.
"We expect their short covering activity to continue in the coming days, which augurs well for the market's upward momentum," said Devarsh Vakil, Head of Prime Research, HDFC Securities.
Further, after four straight weeks of losses, Wall Street managed to eke out mild gains on Friday. The gains came following US President Donald Trump hinting that he would be flexible regarding a new round of tariffs expected to be imposed early next month. The Dow Jones Industrial Average rose 0.08 percent, the S&P 500 rose 0.08 percent to 5,667.44 and the Nasdaq Composite rose 0.52 percent, on Friday.
Going ahead, experts advise caution despite the bullish undertones seen in the markets. "Investors have to be careful. April 2, 2025- the reciprocal tariffs day- is looming large and the uncertainty surrounding that is huge. Investors can wait for clarity to emerge regarding the reciprocal tariffs before taking a call on further investment," stated V K Vijayakumar, Chief Investment Strategist, Geojit Investment Services.
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