The Indian stock market closed on a strong note on Thursday, with the Sensex rising by 862.23 points, or 1.04 per cent, to finish at 83,467.66. Similarly,
the Nifty 50 gained 261.75 points, or 1.03 per cent, closing at 25,585.30. The broad-based rally reflected positive investor sentiment amid robust corporate earnings, robust gains in banking shares and optimism fueled by expectations of an imminent US Federal Reserve rate cut What Sparked the Market Rally? Banking stocks led the charge, with the Bank Nifty rebounding strongly from previous losses, rising around 0.5 per cent. Axis Bank and AU Small Finance Bank saw notable buying interest. Axis Bank’s shares gained momentum following impressive loan growth in the second quarter. Bernstein, a brokerage firm, reaffirmed its ‘outperform’ rating on Axis Bank, setting a target price of Rs 1,250 per share. Additionally, reports about a possible consolidation of public sector banks lifted sentiment. Government insiders revealed plans to merge smaller banks with larger ones by FY27, potentially streamlining operations and enhancing competitiveness. Global Cues And Foreign Investment Boosts Global markets also contributed to the positive mood. Asian indices like South Korea’s Kospi, Japan’s Nikkei 225, and Shanghai’s SSE Composite traded higher, reflecting gains on Wall Street overnight. Foreign Institutional Investors (FIIs) added Rs 68.64 crore to the equity markets on Wednesday, while Domestic Institutional Investors (DIIs) pumped in Rs 4,650.08 crore. Such steady inflows not only strengthen the rupee but also improve market liquidity, supporting higher stock valuations. Trade Talks Between US And India Investor optimism was further fueled by upcoming India-US trade discussions. Commerce Secretary Rajesh Agrawal joined the Indian delegation in Washington, with energy trade expected to be a key topic. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, remarked, “Latest comments from the US administration indicate a reduction in the India-US trade tensions and point to the possibility of a US-India trade deal in the next few weeks.” Rupee Movement The Indian rupee appreciated by 40 paise to 87.68 against the US dollar, aided by central bank interventions, a weaker dollar index, positive equity markets, and lower crude oil prices.
