Dalal Street broke its three-day downtrend on Wednesday with a strong surge in the markets driven by widespread buying. The Sensex and Nifty, key benchmark indices, climbed over 1%, with the Sensex rising by 855.37 points to 85,442.38 and the Nifty50 advancing by 271.30 points to 26,156.10 by 12:12 pm.
Positive global cues, anticipation of a potential US Federal Reserve rate cut, declining crude oil prices, and consistent foreign investor interest bolstered the market rally. Investor sentiment was optimistic across large, mid, and small-cap stocks, propelling the benchmark indices up by almost 1%.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, highlighted that the rally was fueled by the robust performance of global markets, with Asian indices showing strength and Wall Street closing on a positive note. The improved global risk sentiment supported Indian equities, encouraging fresh buying at lower levels. Furthermore, renewed hopes of a US interest rate cut added to the positive momentum. Recent softening in US economic data has raised expectations of monetary policy easing by the Federal Reserve in the upcoming months, enhancing liquidity conditions and attractiveness of emerging markets like India.
The rise in Asian markets, tracking Wall Street gains, and indications of a possible rate cut by the Federal Reserve contributed to the upsurge on Dalal Street. Crude oil prices also fell, hitting Rs 62.48 per barrel, which further boosted domestic markets by reducing input costs for Indian companies and alleviating inflation concerns.
The market surge was led by heavyweight stocks, with Adani Ports, Axis Bank, Trent, Tata Steel, and Bajaj Finance among the top gainers. Banking, metal, and financial stocks witnessed significant buying interest, driving the broader market upwards. However, Bharti Airtel stood as the sole loser on the index.
In midcap and smallcap segments, the Nifty Midcap 100 surged by 1.13% and the Nifty Smallcap 100 by 1.21%, reflecting robust participation beyond frontline stocks. All sectoral indices were in the green, with notable gains in metal, PSU banks, consumer durables, IT, pharma, auto, and financial services sectors.
Analysts emphasized that sector-specific buying and broader market participation indicated a well-rounded market rally, not limited to specific sectors. The real estate sector benefited from stable interest rates and rising housing demand, boosting overall market confidence. Additionally, the rally was supported by improving global commodity sentiment and selective value buying in metal stocks and PSU banks.
Technical analysis indicated a short-term pullback rally in Nifty 50, with key resistance levels around 26,200–26,277 and important immediate support at 25,800–25,750. Maintaining momentum above these levels could pave the way for further upside potential. Traders were advised to consider a buy-on-dips strategy until a clear breakout above resistance levels was confirmed.
While technology and defensive sectors might experience temporary rotation, the sustainability of the rally hinged on evolving macro conditions and supportive earnings trends. Overall, investor sentiment remained positive, with a focus on growth-linked opportunities amidst the market’s constructive outlook.