Sensex jumps 1634 points, Nifty 50 above 23,300; why is Indian stock market skyrocketing? EXPLAINED with five reasons

Stock market today: Despite global brokerage Morgan Stanley revising its year-end Sensex target from 93,000 to 82,000, the Indian stock market extended its bull trend for the second straight session on Tuesday. Among the frontline indices, the Nifty 50 today opened upside at 23,368, its intraday peak. The benchmark index sustained higher levels and closed at 23,348, logging an intraday gain of 519 points. After ending at 23,348, the 50-stock index registered a 949-point gain in the last two straight sessions.

Today, the BSE Sensex opened northward at 76,852 and closed at 76,792 levels, logging an intraday gain of 1,634 points and an increase of 2,945 points in two straight sessions. Sensex's heavyweight Reliance share price remained on an uptrend for the last four sessions, logging around 6.50% rise. 

Today, the Bank Nifty index opened upside at 52,299 and ended at 52,379 levels, logging an intraday gain of 1,377 points. After ending at 52,379 levels, the Bank Nifty index logged almost 2,150 points gain in two straight sessions. 

This Dalal Street rally is participatory as buying also occurred in the broad market. The BSE Small-cap index is up around 3.20%, while the Mid-cap index surged nearly 3% during Tuesday deals.

After the market close on Tuesday, 640 BSE-listed stocks had locked in circuits, 469 of which hit the upper circuit and 171 of which hit the lower circuit. 91 BSE-listed stocks had touched a 52-week high, while 49 BSE-listed stocks touched 52-week lows. BSE-listed stocks hitting 52-week highs include Bajaj Finance Ltd, Bharti Airtel Ltd, Eicher Motors Ltd, InterGlobe Aviation Ltd (Indigo), Chambal Fertilisers & Chemicals Ltd, Coromandel International Ltd, Kaveri Seed Company Ltd, Narayana Hrudayalaya Ltd, and Paradeep Phosphates Ltd. Stocks hitting 52-week lows include Sheela Foam Ltd, Artemis Electricals and Projects Ltd, Landmark Property Development Company Ltd, and Salona Cotspin Ltd.

Why is Indian stock market rising today?

Speaking on the outlook of the Indian frontline indices, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “The S&P 500 is up by 9% from the April lows on the tariff pause. Since the Nifty is up only 3% from the April lows, we have some catching up to do. This is catching up, and some short-covering will keep the market strong for the day.”

Stock market today: Top 5 reasons for D-street rally

According to experts, the Indian stock market is rising after an unexpected U-turn in Trump's tariff policy. They said that the US bond market following the US stock market, the trade war moving towards negotiations, weakness in the US dollar,  divergent views of Donald Trump and US Fed Chairman, and optimistic RBI on Indian inflation are some of the major reasons that have fueled Dalal Street morale in the last two trade sessions. 

1] Crash in US bond market, US stock market: "In normal circumstances, the US bond market and the US stock market move in opposite directions, but after the implementation of Trump's tariffs, the US bond market and the US stock market have crashed, which was a big surprise for the White House officials and a big section of investment experts. This could become possible as countries like China and others had accumulated US bonds after the inauguration of Donald Trump as the 47th President of the US, keeping his tariffs in mind. Once Trump's tariffs became a reality, these countries started selling the US bonds, which forced the US bond market to follow the US stock market crash," said Sandeep Pandey, Founder of Basav Capital.

Connecting this unusual US market trend with Dalal Street, Sandeep Pandey of Basav Capital said that the market believes that Trump has taken a 90-day pause for himself rather than giving any relief to the US trade partners. He said that the market is expecting some tone down in Trump's stance on tariffs as it harms the US economy more than its trade partners.

2] Trade war moving towards trade negotiations: “After the 90 days pause in Trump's tariffs, there is a buzz in the markets that back channels trade negotiations will take place and some breakthrough is expected to come as the US also wants a deal with its trade partners after the crash in the US bond markets and the US stock market,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.

3] Weakness in US dollar: Avinash Gorakshkar of Profitmart Securities said that US dollar rates have also reached around two-year lows. The US dollar index is under 100 after a gap of nearly two years, which means all US assets (Treasury yields, equities, and currency) are under pressure. So, FIIs are expected to change their pattern in the Indian stock market and pump money in Dalal Street-listed stocks after fishing out money from the US bond, equity and currency markets.

4] Hawkish US Fed despite Trump's rate cut rant: "Ever since his inauguration as the 47th US President, Donald Trump has been re-iterating about the US Fed rate cuts at various platforms, but the US Fed Chairman Jerome Powell remained committed to his stance of containing the US inflation first before going for a sharp US Fed rate cut. After the implementation of Trump's tariffs, inflation concerns further shot up, which made the US Fed hawkish on interest rates. So, the American economy was moving against the wishes of the US Fed chairman, and hence, chances of the US Fed rate cut became grim," said Sandeep Pandey of Basav Capital.

5] Optimistic RBI on Indian inflation: “In last week's RBI MPC meeting, the Indian Central Bank maintained its 4% inflation projection for 2025–2026 with Q1 at 3.6%, Q2 at 3.9%, Q3 at 3.8% and Q4 at 4.4%. the RBI Governor also mentioned that Indian inflation risk is evenly balanced, which shows the optimism of the Indian government in containing inflation. This has gone down well on Dalal Street as the US economy is under huge stress of rising inflation, which may force the US Fed to go for any rate cut in the near term,” said Avinash Gorakshkar.

The RBI Governor noted that the overall inflation decreased in January and February 2025, following a significant drop in food inflation.

Stock market outlook

Speaking on the outlook of the Indian frontline indices, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “The Nifty 50 index swept its swing low at 21,744 and bounced back sharply, indicating a classic liquidity sweep followed by strong buying interest. This move clears out weak hands and sets the stage for a rally toward the swing high at 23,869.60. The presence of bullish gaps and rising volumes signals urgency and strength in the ongoing move. Traders and investors should continue to hold long positions as the index appears poised to retest higher levels in the coming sessions.”

Jain added the Bank Nifty opened with a strong gap-up above the key weekly swing high of 52,000, signalling bullish intent. If the index sustains above this level without filling the gap, it will confirm a bullish breakaway gap pattern. The next logical upside is at the next weekly swing high of 53,888. For momentum to continue, BankNifty must hold above 52,000; any dip towards 51,750 will act as a buying opportunity. The structure remains positive unless the gap gets filled.

On the outlook of Sensex today, Anshul Jain of Lakshmishree Investment and Securities said, “Sensex has swept its swing low of 72,700 and gapped up strongly, indicating urgency from bulls to reverse the trend. This kind of sweep, followed by a gap, shows a clear shift in structure from bearish to bullish. The logical upside target now opens up at the swing high of 78,740. Importantly, the index has also jumped above the 10, 20, and 50-day EMAs, and sustaining above these levels will further strengthen bullish momentum in the days ahead.”

However, the global brokerage firm Morgan Stanley has revised its target for the BSE Sensex to 82,000, down from 93,000, indicating an expected upside potential of 9% by December 2025.

Advising Indian stock investors to remain vigilant about news around Donald Trump and the US White House, VK Vijaykumar of Geojit Investments said, “Investors have to understand that the uncertainty triggered by Trump is very much alive and, perhaps, more uncertainty is likely to come with sectoral tariffs, which Trump has declared are going to come. The Indian pharmaceutical sector may again come under pressure from this renewed threat. Even though the bond market has reined in Trump, who was on a rampage, he is unlikely to backtrack on tariffs.”

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.