Benchmark indices extended their winning run for the seventh consecutive session on March 25, driven by foreign fund inflows and strong global cues.
Sensex surged 757.41 points or 0.97 percent, to hit an intraday high of 78,741.69, while the Nifty gained 211.25 points or 0.89 percent to 23,869.60, surpassing the crucial 23,800 mark for the first time since February 5.
IT and banking stocks led the gains, with HCL Technologies, Bajaj Finserv, Infosys, HDFC Bank, and Tata Consultancy Services among the top performers.
Key factors driving the rally:
1) Easing tariff concerns: Investor sentiment received a boost after US President Donald Trump indicated he would adopt a “flexible” stance on tariffs, raising hopes that India could receive some concessions.
However, analysts cautioned that investors should wait until April 2 for clarity. "While momentum is in favour of the bulls, there is no strong fundamental support for a sustained rally, especially with the overhang of reciprocal tariffs," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
2) FII inflows: Foreign Institutional Investors (FIIs) turned net buyers, purchasing equities worth Rs 3,055.76 crore on Monday. "The recent strength in the market can be attributed to renewed FII buying in the cash segment and short-covering in derivatives," said Ajit Mishra, SVP, Research, Religare Broking Ltd.
3) Global cues: Positive trends in global markets also lifted domestic equities. The S&P 500 ended at its highest level in over two weeks, gaining 1.76 percent, while the Nasdaq rose 2.27 percent, buoyed by gains in Nvidia and Tesla. The Dow Jones Industrial Average advanced 1.42 percent. Asian markets were mixed, with Tokyo’s Nikkei 225 trading higher, while Shanghai and Hong Kong edged lower.
4) IT sector rally: IT stocks extended gains for the fourth consecutive session, with the Nifty IT index rising over 2.3 percent. All ten index constituents traded in the green, led by HCL Tech, L&T Technology Services, Coforge, and Mphasis. Market participants attributed the rally to improving global demand and Trump’s softened stance on tariffs.
Nifty IT surges 2% as bulls charge, investors optimistic on Trump's tariff flexibility
5) Strengthening rupee: The Indian rupee opened at 85.58 against the US dollar, touching a three-month high. It later traded at 85.64, recovering from earlier losses. The domestic currency has been on an eight-day winning streak, supported by strong dollar inflows due to intercompany borrowings and profit repatriation ahead of the fiscal year-end, reported Reuters.
Technical outlook
Anand James, Chief Market Strategist, Geojit Financial Services, said, "The next target of 23,807 is within reach. While some consolidation is expected, the momentum could take Nifty towards 24,150-24,200 unless a dip extends beyond 23,480. The 23,600 level will be the key downside marker for the day.”
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