Nifty 50, Sensex end higher for fifth straight session; 5 factors behind Dalal Street’s rally today

Stock market today: The Indian stock market wrapped up Monday's session, April 21, with strong gains as the stellar rally in the heavyweights, particularly in the banking counters, has powered the Nifty 50 and Sensex to stay higher for the fifth consecutive trading session. The shift in overseas investors' sentiment, along with ongoing tariff negotiations between India and the United States, is gaining momentum and supporting the rally in the Indian stock market.

The Nifty 50 ended the trading session with a gain of 1.16%, settling at 24,129 points, while the Sensex concluded the trade with a rally of 1.11%, at 79,421. 

The broader markets continued to outperform the benchmark indices, with the Nifty Midcap 100 gaining another 2.55% to settle at 53,998 points, while its peer Nifty Small Cap 100 index finished the trade at 16,781 points, 2.26% higher than the previous close.

12 out of 13 major sectoral indices ended the session in green, with Nifty PSU Bank emerging as the top sectoral gainer, gaining 2.49%, followed by Nifty Realty, Nifty Oil and Gas, Nifty IT, and Nifty Metal, all ending the session with gains between 2% and 2.37%.

In terms of Individual stocks, Kalpataru Projects International emerged as the top gainer among Nifty 500 stocks, soaring by 13.5%, followed by Just Dial, Vodafone Idea, KFIN Technologies, Suzlon Energy,, Tata Elxsi, Au Small Finance Bank, Aavas Financiers and 66 others ending the session with gains of over 4%

Why is the Indian stock market rising today?

Here are five key reasons behind the stock market rally today:

1. Banks Q4 Results

The rally in the Indian stock market today was largely led by strong gains in banking stocks after the top private banks reported above-estimated Q4 results. HDFC Bank share price rose over 2% to hit record high, while ICICI Bank share price also surged to its all-time high after delivering strong Q4 results, driven by sustained loan growth and improving asset quality. Yes Bank shares also spiked more than 7%.

The gains in two bank stocks drove the blue-chip Nifty 50 index 0.6% higher, with the heaviest-weighted HDFC Bank becoming the index's top boost on the day. The Bank Nifty index also jumped 1.8% to hit a record high, lifted by a surge in banking shares.

2. Resilient Indian Economy

Market participants are of the view that the Indian economy will show resilience amid the global economic uncertainty triggered by the trade war ignited by the US President Donald Trump’s tariff policies.

“Even though the global economic scenario is mired in uncertainty, India appears relatively resilient. India is the only large economy which can grow at 6% even in a slowing global economy. This, along with the declining dollar, has the potential to attract more FPI inflows into India in the short run,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

According to him, the focus of the FIIs will be the domestic consumption themes like financials, telecom, aviation, hotels, select autos, real estate, cement and health care. Growth stocks in the digital space also have the potential to move up.

He believes IT will continue to be under pressure since the growth outlook for the sector is bleak due to the expected sharp slowdown in the US economy.

3. Optimism over US-India Trade Deal

Optimism is running high over the possibility of a trade agreement between the United States and India, as US Vice President JD Vance arrived in New Delhi on Monday morning for a four-day official visit.

Both nations are working against a July deadline to finalise a bilateral trade deal, aiming to avert the imposition of significant new tariffs proposed by President Donald Trump.

“The possibility of India striking a deal with the US in the next few months is being perceived by the market as positive. Viewed from the perspective of the short-term market construct, it is Advantage India,” said Vijayakumar.

4. Interest Rate Cut Hopes

India's Consumer Price Index (CPI) inflation remained benign at 3.3% in March, supported by a sustained moderation in food prices. Analysts expect inflation to hover around the Reserve Bank of India's (RBI) medium-term target of 4% through most of FY2026.

Given the favourable growth-inflation dynamics and the RBI’s recent shift in policy stance to 'accommodative', market participants continue to anticipate a cumulative 75–100 basis points cut in the repo rate by the end of FY2026.

A reduction in interest rates typically lowers borrowing costs for corporates, thereby supporting margins and improving overall profitability.

5. Technicals

The market successfully crossed the 20-day and 50-day SMA (simple moving average) zones last week, which is largely positive. On the weekly chart, a bullish candle was formed, and the market is maintaining an uptrend continuation formation on both daily and weekly charts.

“Nifty 50 still trails its all-time high. If the index continues to mirror the strength in financials, the next level to watch is 24,050, coinciding with the 50% retracement of the fall from the all-time high of 26,277 to the recent low of 21,743, and aligning with the 200 DSMA. Beyond this, the next key retracement is at 24,545. These levels should be viewed as immediate upside targets in the near term,” said Sameet Chavan, Head Research, Technical and Derivative - Angel One.

On the flip side, the Falling Channel breakout point around 23,600 now becomes immediate support, followed by a strong base near 23,250, where the 89 DEMA provided support during the last three sessions, he added.

Chavan maintains a positive outlook, although he believes that the next leg of the up-move may not be as swift going forward.

“Hence, we continue to advise buying on intraday dips, avoiding contra bets, and staying aligned with the prevailing positive bias,” the Angel One analyst said.

Stocks to buy amid Indian stock market rally

In the Auto sector, stocks like Apollo Tyres and JK Tyres displayed range breakouts, while Ashok Leyland broke out of a Falling Wedge, all indicating a bullish potential, said Aditya Gaggar, Director of Progressive Shares. 

“The sector itself is nearing a breakout from a Falling Wedge formation. Stock-specific buying can be anticipated in the energy segment, with BHEL showing a rounding bottom breakout, while others like ONGC, OIL, and Petronet are on the verge of doing so,” Gaggar said.

With an Inverted Head and Shoulder pattern breakout, the PSU Banking sector has ended its corrective move (Canara Bank and SBIN- Inverted Head and Shoulder Breakout, Indian Bank- Range Breakout). Meanwhile, Lodha and Prestige Estate from the Realty segment are forming a Symmetrical Triangle and Descending Broadening Wedge patterns, respectively, indicating potential bullishness shortly, Gaggar added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.