Nifty Tops 25,000, Sensex Soars Over 900 Points: Key Factors Behind Market Rally
Indian equity markets surged on Friday, with benchmark indices hitting fresh highs amid a wave of positive global and domestic cues. The Nifty50 climbed above the 25,000 mark for the first time, reaching 25,047.55—up 254 points or 1.03% by 2:42 PM. Meanwhile, the BSE Sensex soared 835 points to 82,196.79, also registering a 1.03% gain.
Several key factors contributed to the rally:
1. Eased Provisioning Norms for Infrastructure and Real Estate
A recent policy shift by Indian regulators to reduce provisioning requirements is expected to lower funding costs for banks and financial institutions, particularly those lending to infrastructure and real estate projects. This move is likely to ease liquidity and encourage fresh credit flows, creating a supportive environment for lenders and developers alike. The market responded positively to this development, anticipating a boost in capital formation and investment.
2. US Federal Reserve Signals 2025 Rate Cuts
Global investor sentiment was buoyed by the U.S. Federal Reserve’s latest policy stance. Although the Fed kept interest rates unchanged, it reaffirmed projections for two rate cuts in 2025. This dovish signal has reassured markets despite ongoing concerns over high inflation and slower U.S. GDP growth. Indian equities benefited from the Fed’s forward guidance, as expectations of future global liquidity supported risk assets.
3. Weakening Dollar Supports Emerging Markets
The U.S. dollar index declined to 98.57, down 0.34%, making Indian markets more attractive to foreign investors. A weaker dollar generally benefits emerging markets by encouraging capital inflows and supporting currency stability. The Indian rupee also strengthened marginally, further aiding sentiment.
4. Strong Foreign and Domestic Buying
Foreign institutional investors (FIIs) have resumed net buying, picking up equities worth ₹1,824 crore over the last two sessions. Domestic institutional investors (DIIs) continued their steady investment streak, buying ₹2,566 crore worth of stocks for the 12th consecutive day. This coordinated buying from both foreign and domestic players has added depth and confidence to the ongoing rally.
Together, these factors created a strong tailwind for the Indian stock market, pushing indices to record highs and signaling continued investor optimism.
