Sensex surges nearly 1,100 points: What is driving today's rally?
What's the story
The Indian stock market witnessed a spectacular rally on Monday, with the Sensex crossing the 80,250 mark and the Nifty50 surging by 300 points.
At the time of writing, Sensex was up by nearly 1,100 points, while the Nifty was trading above 24,330.
The rally was largely led by strong earnings from Reliance Industries and positive cues from Asian markets.
Despite the ongoing tensions between India and Pakistan, most sectors traded positively, led by PSU Banks and Oil & Gas.
Reliance's impact
Reliance Industries' Q4 results fuel market rally
Reliance Industries' fourth-quarter profit beat estimates, driven by stellar performance in retail and digital businesses.
The good news sent Reliance's stock up by 5.5%, adding nearly 300 points to the Sensex rally.
Nomura noted strong results across segments and listed three near-term triggers for further growth: scaling up the new energy business, potential tariff hikes for Jio, and a possible IPO/listing for Jio unlocking further value for Reliance.
Market support
Sustained FII buying and weakening dollar boost market
Foreign Institutional Investors (FIIs) have played a major role in keeping the market resilient with continued buying of ₹32,465 crore in the past eight days.
"FIIs have dramatically reversed their selling strategy and turned sustained buyers," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
He added that this change is driven by the relative underperformance of US stocks, bonds, and the dollar.
Economic factors
Weakening dollar and falling crude oil prices boost investor sentiment
The weakening dollar has also boosted investor sentiment in emerging markets such as India, encouraging foreign inflows and supporting the rupee.
The dollar index on Monday stood at 99.60, down from 109.88 in early February.
Falling crude oil prices have also eased inflation concerns and are a boon for India as a major oil importer, helping ease pressure on the current account and inflation rates.