The BSE Sensex climbed 665 points, or 0.87%, to 77,013, while the Nifty50 advanced 196 points, or 0.85%, to 23,387 as of 12:20 pm. The Nifty has risen in each of the previous four sessions, marking its longest daily winning streak in about seven weeks. Including Friday’s gains, it is now up by about 4% this week, on track for its best week since July 2022.
All 13 major sectors posted gains. IT stocks, which fell over 2% at the open after Accenture flagged a slowdown in U.S. discretionary spending, reversed losses and traded 0.4% higher.
The total market capitalization of all BSE-listed companies jumped by Rs 4.31 lakh crore to Rs 412.92 lakh crore.
Why is the stock market rising today?
1) FIIs Return to D-Street
After months of persistent selling, Foreign Portfolio Investors (FPIs) have turned buyers in two of the last four sessions, boosting market sentiment. On March 20, FPIs purchased Rs 3,239 crore worth of equities, signaling a shift in their stance.
“The rally in the market this week, which saw the Nifty rise by 3.5%, has come at a time when trade tensions are escalating, and more is expected when the reciprocal tariffs kick in on April 2nd. The main driver of the rally is the buying by FIIs in the cash market over two days and, perhaps more importantly, a sharp decline in their short positions and an increase in long positions in the futures market,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2) Fed Signals Two Rate Cuts in 2025
The US Federal Reserve held interest rates steady but reaffirmed its projection for two rate cuts by the end of 2025, in line with its December forecast. While the Fed raised its inflation expectations due to upcoming tariffs, the prospect of rate cuts has eased concerns about aggressive monetary tightening.
Lower US interest rates weaken the dollar and reduce Treasury yields, making emerging markets like India more attractive to foreign investors.
3) Falling US Bond Yields and Weaker Dollar Boost Sentiment
The US 10-year Treasury yield has dropped to 4.25% from around 4.5% in mid-February, while the 2-year yield is down to 3.97% from 4.28%. Additionally, the US Dollar Index is trading below 104, further supporting positive sentiment in emerging markets.
A weaker dollar and lower US bond yields make Indian equities more attractive to foreign investors, potentially driving higher inflows into the market.
4) Technical Indicator
Sameet Chavan, Head of Research, Technical and Derivative at Angel One, said, “Bulls continue to dominate as the Nifty extended gains for the fourth straight session. With strong momentum and evolving price patterns, we expect this rally to continue in the near term.”
He noted that the index has decisively broken out of a Falling Channel pattern, with the RSI crossing above 50, signaling a bullish shift in momentum.
On key levels, Chavan highlighted 23,300-23,400 as an immediate hurdle, with 23,800 as the next key resistance. Support levels are seen at 23,000 (50-DEMA) and 22,800 as strong support.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
