Sensex ends 1,200 points higher, Nifty settles above 25,050; what drove the Indian stock market? EXPLAINED

Indian stock market benchmarks, the Sensex and the Nifty 50, clocked solid gains on Thursday, May 15, led by shares of select heavyweights, including HDFC Bank, ICICI Bank and Reliance Industries.

The Sensex opened at 81,354.43 against its previous close of 81,330.56 and jumped 1,388 points, or 1.7 per cent, to an intraday high of 82,718. The Nifty 50 reclaimed the 25,000 mark as the index, after starting the day at 24,694.45 against its previous close of 24,666.90, jumped 1.8 per cent to hit an intraday high of 25,116.

The 30-share index finally closed at 82,530.74, up 1,200 points, or 1.48 per cent, while the Nifty 50 ended with a gain of 395 points, or 1.60 per cent, at 25,062.10.

The mid and small-cap segments also rose, but they underperformed. The BSE Midcap index closed 0.67 per cent higher, while the Smallcap index rose 0.94 per cent.

The overall market capitalisation of BSE-listed firms rose to ₹440 lakh crore from nearly ₹435 lakh crore in the previous session, making investors richer by ₹5 lakh crore in a single session.

What drove the Indian stock market higher?

Experts highlighted the following five reasons behind the sharp rally in the Indian stock market:

1. Value buying in select large-caps

Experts suggested that select heavyweight stocks are witnessing value buying after the recent correction, which has boosted the market benchmarks.

Shares of Tata Motors, HCL Tech, Eternal, Adani Ports and Asian Paints rose 2-4 per cent, ending as the top gainers in the Sensex index.

However, shares of Reliance, ICICI Bank, HDFC Bank, Bharti Airtel and Tata Motors were the top contributors to the gains in the Sensex index.

2. US-India trade deal in sight

According to media reports, US President Donald Trump has claimed that India had proposed a trade agreement with "no tariffs" or 'zero tariffs".

"US President Donald Trump said on Thursday that India had offered the US a trade deal that proposed no tariffs," reported Reuters.

Growing optimism surrounding a potential US-India trade deal influenced market sentiment, giving a boost to market benchmarks.

3. Decent Q4 earnings underpin sentiment

Experts pointed out that the Q4 earnings of India Inc. have been stable so far, underpinning market sentiment.

According to brokerage firm Motilal Oswal Financial Services, till May 5, earnings for 27 Nifty companies showed a mixed but generally better-than-expected performance for Q4FY25, with year-on-year (YoY) growth of 9 per cent in sales, 6 per cent in EBITDA, 10 per cent in PBT, and 4 per cent in PAT.

"These figures exceeded consensus estimates, particularly for PAT and EBITDA. Of these, six companies beat and five missed PAT expectations, while six exceeded and four fell short of EBITDA estimates," said Motilal Oswal.

4. Macro boost

India's healthy macro outlook keep the underlying sentiment of the market positive. With retail inflation easing to a six-year low of 3.16 per cent in April, hopes of further rate cuts by the Reserve Bank of India has grown stronger.

Experts highlight that a consistent decline in inflation, rising disposable incomes, increased government spending, and falling interest rates are the key positive factors for the market.

5. Technical factor

According to Rupak De, Senior Technical Analyst at LKP Securities, the recent consolidation breakout, along with a move above the swing high, has increased the probability of the index reaching 25,690 in the short term.

"The immediate resistance is placed at 25,360, above which further upside potential may be unlocked. On the downside, 24,400 is expected to act as strong support in the short to medium term. A decisive break below this level could cause the ongoing rally to lose momentum. Until then, a buy-on-dips strategy is likely to remain effective," said De.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.