Sensex gains 705 pts, Nifty Bank hits record; what's driving market rally?

Following a negative start, Indian equity markets witnessed a sharp rebound on Friday on the back of continuous foreign fund inflows, buying in heavyweight stocks, and easing crude oil prices. The BSE Sensex rallied 705 points and hit a high of 84,172.24. The NSE Nifty50 surpassed the 25,700 mark in the intraday to hit a high of 25,776.75, up nearly 191 points from the previous day's close of 25,585.

 

Last checked, the BSE Sensex was trading at 84,091.93 levels, up 624 points or 0.75 per cent, while the NSE Nifty50 index was up 181.05 points or 0.71 per cent at 25,766.35 levels.  

The Nifty Bank index touched a record high of 57,828.30 on Friday, surpassing its previous peak of 57,628.40 recorded on July 2, 2025. The index has surged over 10,000 points from its 52-week low of 27,702.

 

Eighteen of the 30 Sensex constituents were trading in green, including Asian Paints, Bharti Airtel, M&M, Bharat Electronics, Hindustan Unilever, Reliance, and Titan, gaining in the range of 1 to 5 per cent.

 

In the broader market, the NSE MidCap 100 index was down 0.18 per cent, while the Nifty SmallCap 100 index rose 0.3 per cent.

 

On the sectoral front, the Nifty FMCG index was the top gainer, up 1.45 per cent, followed by Nifty Auto, Bank, Financial Services, Consumer Durables, Realty, Pharma, and Financial Services. On the other hand, Nifty IT and Media were down around 1.5 per cent each. Nifty Energy, Metal, and PSU Bank were also trading lower. 

 

VK Vijayakumar, chief investment strategist at Geojit Investments, said the market is resilient and technically strong. Price action in the leading stocks indicates short covering. Even now, there are big shorts in the system, and the strength in the market might keep the bears on the back foot, facilitating further shorts. 

Here are the key reasons behind the market rally today:

Institutional flows: Foreign Institutional Investors (FIIs) extended their buying streak for a second day, buying equities worth ₹997.29 crore on Thursday. Domestic Institutional Investors (DIIs) were also net buyers, investing ₹4,076.20 crore. Continued FII buying is boosting market liquidity and supporting investor confidence.

 

Easing crude oil prices: Global benchmark Brent crude slipped 0.25 per cent to $60.94 per barrel. Softer oil prices help ease inflation concerns and lower India’s import costs, offering a supportive backdrop for domestic equities.

 

Rupee strengthening: The Indian rupee (INR) gained by 21 paise to 87.75 against the US dollar in early trade, supported by a softer greenback and possible intervention by the Reserve Bank of India (RBI).

 

Buying in heavyweight stocks: Rally in heavyweight stocks such as Reliance Industries, Asian Paints, Bharti Airtel, HDFC Bank, and M&M also supports the index performance. "Good results from the banking majors HDFC and ICICI can impart fundamental support to the market, and if RIL, which has been a laggard for some time now, also joins the rally, the market can sustain the momentum for some more time. Muhurat trading and the festival cheer can add to the bullish spirits," Vijayakumar said. 

Technical view

Ponmudi R, chief executive officer of Enrich Money, said technically, Nifty is consolidating within the 25,550–25,750 band. Option data indicates strong Put writing at 25,470–25,330, creating a reliable support base, while Call writing at 25,650–25,750 defines the immediate resistance zone. 

 

"A decisive breakout above 25,666 could open the next leg of the rally toward 26,000–26,300, whereas a sustained slip below 25,470 may trigger mild profit-booking. The structure stays positive as long as Nifty holds above the 25,470–25,500 zone, favouring a buy-on-dips approach," he said.