Sensex
According to analysts, fresh buying and short-covering by foreign institutional investors (FIIs), driven by optimism about potential trade deals with the US, led to a sharp rally in the market on Thursday. The Sensex reclaimed the 78,000 mark, while the Nifty breached the 23,700 mark.
Both Indian benchmark indices—the BSE Sensex and NSE Nifty 50—staged a strong intraday rebound, extending their winning streak to four consecutive sessions.
Markets had opened on a cautious note amid weak global cues, primarily due to the ongoing US-China tariff standoff and cautionary remarks by US Federal Reserve Chair Jerome Powell on the economic risks posed by tariffs.
The BSE Sensex opened 76 points lower at 76,868 and soon slipped to 76,666. However, it reversed course and hit a high of 78,173 during the day’s trade – a recovery of 1,507 points from the day’s low. By 1 pm, it had risen 1,120 points to trade around 78,160.
The Nifty 50 similarly rebounded from a low of 23,299 to peak at 23,748, up 305 points, or 1.3%, at 23,744.
With this rebound, both indices are now up for the fourth consecutive day. Over this period, the Sensex has gained over 4,000 points, while the Nifty has surged nearly 1,000 points.
“India’s recent outperformance is striking. We are the only major market to have erased all losses since April 2, 2025,” noted V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He attributes India’s strength to its domestic consumption-based economy, making it less vulnerable to global tariff pressures. He also points to hopes of a bilateral trade deal between India and the US in the near future, as India is seen as one of the top four allies (along with the UK, Japan, and South Korea) that may soon finalize trade deals with the US.
Key Drivers of the Market Rally on Thursday:
Short-covering and Oversold Markets
Analysts note that markets were oversold following months of declines. Recent developments suggesting a potential easing of global trade tensions prompted short-covering, which supported the rally.
“The current setup offers an improved risk-reward profile in select sectors,” said Ruchit Jain, Head of Technical Research at Motilal Oswal. “FIIs have resumed buying, and combined with short-covering in index futures, this has reinforced the uptrend.”
Fresh FII Buying
FIIs have turned net buyers in the cash market over the past two sessions, purchasing stocks worth Rs 10,000 crore— including their third-largest single-day purchase of the year on Tuesday.
US-China Trade War and Indian Advantage
Tensions escalated after US President Donald Trump threatened tariffs of up to 245% on Chinese imports, following China’s announcement of tariffs of up to 84% on US goods. However, Trump later announced a 90-day delay on new tariffs for most countries, excluding China.
Analysts believe India could benefit from the fallout of the US-China trade war, potentially boosting investor confidence in Indian equities.
Sectoral Leadership
The rally was led by financials, with private banks such as HDFC Bank and ICICI Bank contributing nearly 50% of the day’s gains. Bank Nifty also hit a four-month high.
Other top performers included Reliance Industries, Bharti Airtel, Eternal (formerly Zomato), Sun Pharma, Adani Ports, Tata Consumer, Grasim, and Trent.
