Sensex surges over 800 points: Key factors behind market rise
What's the story
The Indian stock market has made a strong comeback, with the Sensex and Nifty gaining over 1% each in today's session.
At the time of writing, Sensex was up by 813 points to 73,802, while the Nifty had climbed over 270 points to trade at 22,353.
This comes as a much-needed respite for traders after a series of constant declines in the past few sessions.
The rally is driven by robust IT stocks performance and positive cues from Asian markets.
IT surge
IT stocks lead market recovery
The Indian stock market's recovery was largely led by a rally in IT stocks. Coforge jumped nearly 10% after it won a 13-year, $1.56 billion deal from Sabre Corp.
Other heavyweights such as Infosys and Persistent Systems also gained after being added to JPMorgan's high-conviction ideas list owing to their growth potential.
The broad-based rally saw 11 of the 13 major sectoral indices trading in green with the IT index rising 2%.
Global impact
Asian markets boost investor sentiment
The Indian stock market's surge was also aided by positive cues from Asian markets. This was triggered by US Commerce Secretary Gina Raimondo's hint that some tariffs on Canada and Mexico could be rolled back.
The MSCI Asia ex-Japan index gained 1%, boosting overall investor sentiment.
Indonesia's stocks jumped an impressive 3%, after a sharp fall the previous day, while currencies like Malaysian ringgit and Philippine peso strengthened slightly as US Treasury yields softened.
Economic indicators
India's services sector shows robust growth
On the home front, India's services sector recorded strong growth in February, driven by strong demand and hiring.
HSBC's services PMI jumped to 59.0 from January's 56.5, largely due to rising export orders.
This positive economic indicator added to the relief rally in equities, providing some respite amid ongoing trade tensions which are expected to continue affecting market volatility in the foreseeable future.
Trade tensions
Tariff uncertainty continues to weigh on market sentiment
Despite the positive market surge, tariff uncertainty continues to weigh on sentiment, causing low trading volumes.
US President Donald Trump confirmed new reciprocal tariffs would take effect from April 2, which could trigger fresh volatility across global markets including India.
Market expert VK Vijayakumar from Geojit Financial Services noted while markets are drifting lower on weak volumes, this doesn't necessarily mean a sustained downtrend as new developments can quickly change the course of events.