Nifty, Sensex Resume Rally — Three Reasons Why Markets Have Bounced Back
The NSE Nifty 50 and BSE Sensex resumed their rally on Monday, with Nifty surging 1.30% and Sensex climbing 1.38%, making Nifty the top gainer among Asian indices. This follows a surge on April 23 when both benchmark indices reached a three-month high. The resumption came after the rally briefly dipped due to violence at the India-Pakistan border in Jammu and Kashmir, but it has regained momentum.
The three main reasons for this market surge are ongoing earnings, heightened market activity, and strong foreign and domestic institutional investor participation, alongside mixed global cues.
Fourth Quarter Earnings
Several companies have reported strong earnings, boosting investor confidence. For instance, Reliance Industries Ltd. saw a 9% increase in revenue to Rs 2,61,388 crore and a 5% rise in net profit to Rs 19,407 crore.
L&T Finance Ltd. also reported an 8.2% increase in revenue to Rs 2,150 crore and a 15.7% rise in net profit to Rs 631 crore, along with a final dividend recommendation of Rs 2.75 per share. These positive earnings reports have contributed significantly to the market's upward momentum.
There has been notable market activity, such as Mahindra & Mahindra Ltd.'s acquisition of SML Isuzu for Rs 555 crore. This includes buying a 43.96% stake from Sumitomo Corp. and a 15% stake from Isuzu Motors.
Strong FII And DII Participation
Foreign portfolio investors and domestic institutional investors have been active in the market.
On April 25, 2025, FPIs bought shares worth Rs 2,952.33 crore, while DIIs were net buyers to the tune of Rs 3,539.85 crore.
Despite some selling in the secondary market earlier in the month, this strong participation has provided substantial support to the market.
In the broader market BSE MidCap and BSE SmallCap also gained. MidCap gained as much as 1.36% and SmallCap gained 0.64% on Monday.
Global Cues
Positive global cues have also played a role. The Hang Seng rose and Japan's Topix also climbed in early, and Australia's S&P/ASX 200 advanced 0.36%.
In the US market, the S&P 500 recorded its longest winning streak since January, rising 0.79%, while the Nasdaq 100 gained 1.21%, led by strong performance in megacap stocks. These global trends have positively influenced the Indian markets.
The US stock market extended its four-day winning streak, driven by fresh indications that tariff negotiations between the US and China are progressing well. US President Donald Trump remarked that tariffs on China will be significantly reduced but will not go to zero at the end of the negotiation talks.
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