Sensex Soars 550 Points, Nifty Reclaims 23,000: Fed’s Dovish Stance and Tariff Relief Drive Market Rally
Sensex Soars :The Indian stock market extended its winning streak for the fourth straight session on Thursday, as strong global cues, led by the US Federal Reserve’s stance on rate cuts and tariff relief, fueled investor optimism. The BSE Sensex surged 564.77 points (0.74%) to hit an intraday high of 76,013.82, while the NSE Nifty 50 advanced 163.5 points (0.71%) to cross the psychological mark of 23,071.10.
The rally was primarily driven by IT stocks, with the Nifty IT index gaining 2.2% in early trade. Leading the pack were major technology firms such as Wipro, Infosys, and Tata Consultancy Services (TCS), each jumping nearly 3%. Other notable gainers included Bharti Airtel and Eicher Motors, adding to the bullish sentiment.
🔥 Key Factors Fueling the Market Rally
1️⃣ Federal Reserve’s Dovish Stance on Rate Cuts & Tariffs
The US Federal Reserve reaffirmed its outlook for potential interest rate cuts later this year, reassuring investors who were concerned about inflationary pressures from newly imposed tariffs.
Fed Chair Jerome Powell emphasized that the impact of tariffs on inflation is expected to be temporary and that the risks of a recession are low. This was interpreted as a positive signal for global markets, leading to a broad-based rally in equities.
📢 “Markets will read this as a slightly dovish stance, with the Fed not overly concerned about economic slowdown or inflation. Both stocks and bonds reacted positively,” said Christian Hoffmann, Portfolio Manager at Thornburg Investment Management.
2️⃣ Strong Buying in Domestic Consumption & Beaten-Down Sectors
Apart from IT stocks, the broader market saw increased investor interest in domestic consumption-driven sectors, including banking, finance, aviation, and digital stocks.
Several stocks hit fresh 52-week highs, including:
- Kotak Mahindra Bank
- Bajaj Finance
- InterGlobe Aviation (IndiGo)
- Muthoot Finance
Additionally, previously underperforming sectors such as defense and shipping are witnessing a revival, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
3️⃣ Strong US Market Cues Lifting Global Sentiment
Overnight gains in Wall Street indices provided a strong tailwind for Indian equities:
✅ Dow Jones Industrial Average: +383.32 pts (0.92%) to 41,964.63
✅ S&P 500: +60.63 pts (1.08%) to 5,675.29
✅ Nasdaq Composite: +246.67 pts (1.41%) to 17,750.79
The positive sentiment extended to US futures, with the Nasdaq and S&P 500 futures advancing 0.4% and 0.3%, respectively.
However, major Asian markets showed mixed trends, with:
🔻 Japan’s Nikkei 225 down 0.40%
🔻 China’s CSI 300 down 0.46%
🔻 Hong Kong’s Hang Seng Index falling 1.5%
🔎 Technical Analysis & Market Outlook
📊 Technical experts anticipate market volatility within the 23,100-22,730 range in the near term.
🔹 If Nifty slips below 22,800, it could indicate a larger corrective move.
🔹 Resistance levels stand at 23,460-23,500, with a short-term target of 23,807.
💬 “Traders should remain cautious and look for signs of consolidation before taking fresh long positions,” said Anand James, Chief Market Strategist at Geojit Financial Services.
📌 Key Financial Ratios of Top Performing Stocks
| Stock Name | P/E Ratio | P/B Ratio | Dividend Yield | 52-Week High |
|---|---|---|---|---|
| Wipro | 25.3 | 4.5 | 0.55% | ₹580.75 |
| Infosys | 30.1 | 6.2 | 1.42% | ₹1,670.80 |
| TCS | 35.7 | 15.8 | 1.25% | ₹4,250.50 |
| Bharti Airtel | 55.2 | 6.8 | 0.30% | ₹1,243.90 |
| Eicher Motors | 41.6 | 10.2 | 0.95% | ₹4,675.80 |
📌 Note: P/E (Price to Earnings), P/B (Price to Book), Dividend Yield (returns from dividends relative to stock price).
📢 Frequently Asked Questions (FAQs)
🔹 Why did Sensex and Nifty rally today?
The rally was driven by strong global cues, particularly the US Federal Reserve’s stance on rate cuts and inflation concerns. Additionally, IT stocks and domestic consumption-driven sectors saw strong buying interest.
🔹 Which stocks were the biggest gainers in today’s rally?
The top gainers included Wipro, Infosys, TCS, Bharti Airtel, and Eicher Motors.
🔹 What impact did the US Fed’s comments have on global markets?
The Fed’s dovish stance on rate cuts and inflation reassured investors, boosting global markets, including US indices like the Dow, S&P 500, and Nasdaq, which closed with solid gains.
🔹 What is the short-term outlook for Nifty?
Nifty is expected to trade within 23,100-22,730 in the short term, with a potential target of 23,807. A break below 22,800 could signal a corrective phase.
🔹 Are IT stocks a good investment right now?
IT stocks performed well today, led by Wipro, Infosys, and TCS, due to improving global demand and easing inflation concerns. However, investors should analyze valuation levels before investing.
Conclusion 🏆
The stock market’s strong performance today was fueled by global optimism, strong IT sector momentum, and positive economic cues from the US Fed. While short-term volatility remains, the overall sentiment remains bullish as investors look forward to further policy clarity and domestic growth trends.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.