Nifty, Sensex Near Two-Month High — Four Reasons Why Markets Are Up

The NSE Nifty 50 and BSE Sensex extended their gains for the sixth day after Nifty posted best weekly gains in four years last week. The indices rallied on the back of banking and realty stocks.

So far during the day, the Nifty 50 has risen 1.40% to the day's high of 23,677.90, the highest level since Feb. 7. The Sensex was up 1.43% to the day's high of 78,005.26, the highest level since Feb. 7.

As of 2:07 p.m., the Nifty 50 was trading 1.37% higher at 23,671.15, and Sensex was trading 1.42% higher at 77,993.82.

"After correction, now finally markets are starting to turn around," said Raamdeo Agrawal, chairman and co-founder, Motilal Oswal Financial Services Ltd.

The banking stocks led the large cap rally on Monday. The banking sector, which was on a decline, saw a sharp recovery in the last few sessions, with the Nifty Bank hitting a three-month high and Nifty Financial Services near six-month-high on Monday.

The banking stocks led the large cap rally on Monday. Kotak Mahindra Bank shares rose over 5% to Rs 2,184.25. NTPC Ltd., Power Grid Corp. of India, Axis Bank Ltd. and State Bank of India also rose on Monday. The other gainers for the day included Bajaj Finserv Ltd., Reliance Industries Ltd., ICICI Bank Ltd. and Tech Mahindra Ltd.

According to provisional data on Friday, foreign portfolio investors bought stocks worth Rs 7,470.36 crore. Overseas investors were buyers on Thursday as well and bought stocks worth Rs 3,239 crore. This has given the market hope that there could be a possible turn around in FPI sentiments towards Indian stocks.

The markets have seen a decline since they hit a high in September 2024. While Nifty is down 9.89% since September, Sensex saw a 9.10% decline. Nifty fell 6.82% in the first two months of this year, while Sensex fell 6.76%. This however reduced the valuation froth in the Indian stock markets.

The correction in the broader markets provides "breathing space" to investors with a long-term horizon, said Gautam Duggad, head of research for institutional equities at Motilal Oswal Financial Services Ltd.

In addition to the rise in markets, the Indian rupee also appreciated against the dollar. The rupee strengthened 35 paise to 85.62 against the US Dollar, touching the highest level since Jan. 1. The Indian rupee has risen 3.56% from mid-March and erased the yearly losses against US dollar.