Sensex gains 700 points: 3 reasons why stock market is rising today

India Today

26-05-2025

Dalal Street started the week on a positive note with benchmark indices surging on Monday, boosted by global and domestic factors. Auto and metal sector stocks led the rally on Dalal Street.Sensex surged over 700 points to 82,437.76 in early trade, while Nifty gained over 200 points to 25,063.65 as of 9:50 am.Akshay Chinchalkar, Head of Research, Axis Securities, said, "The Nifty rallied a percent on Friday, putting some short-term nervousness to rest."advertisement
"Technically speaking, an important swing low seems to have been formed at 24462 in a classic retest of a resistance-turned-support area, but bulls need to break through the 24946 - 24974 area to get an all-clear. Should this happen, the next hurdle zone lies between 25000 and 25436," he added.INDIA BECOMES 4TH LARGEST ECONOMYMarket experts say that India moving up in global rankings has given investors confidence.The news of India overtaking Japan to become the fourth-largest economy in terms of GDP has been seen as a boost for the country's growth outlook. This has helped lift the mood on Dalal Street.Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, 'News of India becoming the fourth largest economy in the world would be a near-term morale boost for the market.'RBI'S DIVIDEND BOOSTAnother major reason is the huge dividend payout by the RBI to the government. The central bank recently announced a dividend of Rs 2.11 lakh crore for FY24, which is much higher than what was expected. This extra money will help the government manage its spending and stay within its fiscal deficit target.'RBI's bumper dividend payment to the government exceeding the budget estimates will help contain the fiscal deficit target for FY26 at 4.4%,' said Vijayakumar. 'This, in turn, can sustain the low inflation and declining interest rate trend which will continue to support the equity market,' he added.EASING TRADE TENSIONSOn the global front, US President Donald Trump has decided to extend the deadline for trade talks with the European Union. This move has helped ease fears of a fresh trade war, which had been worrying investors across the world.Trump has also postponed the 25% tariff threat on Apple if the company does not shift its iPhone production to the US. While the situation remains uncertain, the extension of talks is being seen as a short-term relief.'It appears that the good news regarding tariffs is behind us,' said Vijayakumar. 'Trump's comments regarding tariffs on the EU and the 25% tariff threat to Apple if they don't manufacture iPhones in the US suggest that bad news impacting the market can suddenly come from the US President any time.'OTHER POSITIVE TRIGGERSIn addition to these factors, the early arrival of the monsoon has added to the positive tone in the market. The India Meteorological Department (IMD) said that the monsoon arrived in Kerala on Saturday, eight days earlier than the normal date of June 1. This is the earliest onset in 16 years.The IMD also reported that the monsoon has already reached parts of Karnataka, Puducherry, Tamil Nadu and Mizoram. It is expected to cover more regions, including Maharashtra, Andhra Pradesh, West Bengal and Sikkim, in the coming days.Meanwhile, foreign portfolio investors (FPIs), who had been selling shares in recent days, were net buyers on Friday. FPIs bought Rs 1,794.59 crore worth of equities, which also helped support the market.Dr Vijayakumar added that the performance of midcap companies in the Q4 results has also played a role. 'A significant feature of the Q4 results season is the outperformance of the midcaps which has helped reduce the high valuations of the segment,' he said.(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.)Must Watch