Sensex rises over 500 points, crosses 83,000: Why is stock market rising today?

India Today

9 hours ago

After weeks of sideways movement and jittery global cues, Dalal Street woke up to a broad-based rally on Thursday morning, with the BSE Sensex soaring over 500 points to cross the 83,000 mark for the first time this year. The Nifty50, too, surged past 25,400 in early trade, buoyed by easing geopolitical tensions and a return of risk appetite in global markets.advertisementBy 9:59 am, the Sensex had gained 549 points to touch 83,305.06, while the Nifty rose by 172.75 points to 25,417.50. The mood across the broader market was upbeat, and volatility remained surprisingly muted.WHAT'S DRIVING THE RALLY?At the heart of Thursday's rally was a glimmer of diplomatic relief: easing tensions between Israel and Iran have reassured global investors, shifting sentiment to a more 'risk-on' mode.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that 'with ceasefire between Israel and Iran, globally markets are in a risk-on mode.' However, he cautioned that the rally could be short-lived if unresolved trade issues, such as the reciprocal tariff dispute, resurface after July 9, when the current pause ends.'The focus will shift quickly to what happens around that deadline,' he added. 'Positive news on a potential India-US deal could boost markets, while disappointment may constrain the rally.'DOMESTIC TAILWINDSadvertisementThe rally wasn't just a global spillover. Bullishness was underpinned by the Reserve Bank of India's latest bulletin highlighting India's economic resilience, along with low oil prices—hovering around $65.50 per barrel—and buoyant cues from Wall Street, where the S&P 500 is flirting with record highs.Prashanth Tapse, Senior VP (Research) at Mehta Equities, said Thursday's rally had the hallmarks of a breakout. 'Nifty is hovering near its all-time high of 26,277.35, supported by strong macro indicators and easing geopolitical concerns,' he said. 'Technically, Nifty is poised for further gains with targets at 25,319 and 25,500. Support holds strong around the 25,000 mark.'Among sectoral performers, financials and metals led the charge, with notable stock-specific momentum in names like Vodafone Idea and Lupin. Tapse also highlighted bullish trades in Bank Nifty and picks such as Prestige Estate, Indus Tower, and M&M.VALUATION GAP CONCERNSYet, not everyone is celebrating without caveats. Dr. Vijayakumar pointed out that Indian equity valuations have entered overheated territory. 'Valuations are stretched—trading at over 22 times estimated FY26 earnings,' he said. 'In contrast, Chinese stocks, as represented by the Hang Seng Index, are trading at a PE of around 15.'This disparity, he warned, could trigger a 'Sell India, Buy China' pivot among foreign institutional investors (FIIs), especially if global risk appetite shifts or profit-taking begins. However, domestic institutional investors (DIIs), flush with liquidity, may cushion any such outflows.TECHNICAL INDICATORSadvertisementOn the technical side, momentum remains strong, but analysts advise vigilance. Akshay Chinchalkar, Head of Research at Axis Securities, noted that while Wednesday's Nifty rally of 200 points suggests near-term bullishness, the inside-day pattern points to an imminent large move—though the direction remains uncertain.'Immediate resistance lies between 25,310 and 25,360, with a higher band at 25,500,' he said. 'Support levels are at 24,960–25,010, and deeper at 24,800. If bulls defend these levels, a push toward the 25,800 zone could be on the cards.'WHAT NEXT?The current rally reflects optimism, but it's not without fragility. Geopolitical risks remain on the radar, and trade tensions could flare again in July. Meanwhile, India's elevated valuations demand caution, especially as global investors scan for value elsewhere.For now, the Sensex's leap past 83,000 is a positive sign, but whether it marks the start of a sustained uptrend or just a relief rally in disguise will depend on what happens next on the global stage.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsMust Watch