Stock market today: India-Pakistan ceasefire effect! Sensex hits 82K, Nifty 50 above 24,700; rally explained in 5 points

Stock market today: Buoyed by the India-Pakistan ceasefire, the key benchmark indices of the Indian stock market had a big gap-up opening on Monday. The Nifty 50 index opened upside at 24,420 and touched an intraday high of 24,806, recording an intraday gain of over 750 points. The BSE Sensex opened at 80,803 and touched an intraday high of 82,017. While climbing to this intraday high, the 30-stock index logged an intraday gain of over 2,500 points. The Bank Nifty index opened at 54,658 and regained the 55K peak by hitting an intraday high of 55,392.

Why is the Indian stock market skyrocketing today?

According to stock market experts, the primary reason for the Indian stock market rally is the India-Pakistan ceasefire. However, they said the US-China trade deal, UK-UK trade deal, India-UK FTA (Free Trade Agreement), strong AMFI data fueling retail investors' sentiment and buzz for FIIS' buying are some other important reasons that have together fueled Dalal Street indices on Monday.

Stock market today: Top 5 reasons for bull run

1] India-Pakistan ceasefire: “The primary reason for the Indian stock market rally is India-Pakistan ceasefire. The de-escalation in the India-Pakistan tension removes a key overhang on investor sentiment and is likely to be seen as a major positive development by financial markets,” said Prashanth Tapsi, AVP — Research at Mehta Equities.

Historically, markets have shown resilience and a tendency to recover following such geopolitical de-escalations.

2] US-China, US-UK trade deal: “After the announcement of the US-China trade deal, the outlook for global sentiments has improved. Now, investors are getting some clarity on Trump's tariff, which has fueled the major Asian bourses, including Dalal Street,” said Avinash Gorakshkar, Head of Research at Profitmart Securities. 

“The trade deal announcement between the US and UK and reports that U.S. and Chinese officials are meeting in Switzerland over the weekend for trade discussions, paved the way for broader negotiations and tariff de-escalation, supported investor sentiment,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

3] India-UK FTA: “Last week, the India-UK trade deal was announced, which is expected to give some relief to the Indian export and import business. So, the market is trying to discount this big development after the announcement of de-escalation in India-Pakistan tension,” said Gorakshkar.

4] Buzz for FIIs' buying: “Despite the India-Pakistan tension, the Indian stock market has exhibited surprising resilience. The fundamental reason for this resilience has been the sustained FII buying. After the announcement of India-Pakistan ceasefire, there is buzz for FIIs' going highly bullish on the Indian stocks, which is fueling the uptrend on Dalal Street,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

5] Strong AMFI data fueling retail investors' sentiments: “The latest data from AMFI shows that monthly inflows through the Systematic Investment Plan (SIP) route into mutual funds rose 2.72 % to a fresh all-time high of ₹26,632 crore in April,” said Devarsh Vakil of HDFC Securities.

“The strong AMFI data has fueled retail investors' sentiment as they closely follow the DIIS' pattern for bottom fishing. As DIIs have ample money in hand, they are bound to pump money at discounted levels and garner higher returns in the short term. Most importantly, the Indian stock market had remained range-bound, unlike the Pakistan stock market. So, DIIs and retail investors were waiting for the ease in India-Pakistan tension and once the ceasefire got announced, they pounced strongly to grab the opportunity for making money from the Indian stock market,” said Avinash Gorakshkar of Profitmart Securities.

How to make money in this bull run?

Unveiling the strategy to make money in this bull run, Prashanth Tapsi of Mehta Equities said, “Defence and Banking sectors may see renewed buying interest as immediate geopolitical risks subside while Broader indices are also likely to recover recent losses from the past 2–3 sessions, aided by improving sentiment. All eyes would be on FII, which turned negative on Friday's trading session after continuing net buyers in the last two weeks.”

“The market’s structure remains solid, with both daily and weekly moving averages aligned in a bullish setup. Any dip towards 24,500 to 24,450 levels should be seen as a buying opportunity as the new support for the Nifty 50 index has now moved from 24,050 to 24,300 levels. On the upper side, the 50-stock index is looking set to touch 24,800 soon. On breaking above 24,800 on a closing basis would mean a fresh short-term target of 25,100,” said Anshul Jain of Lakshmishree Investment and Securities.

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 taking any investment decisions.