Sensex zooms 900 pts intraday; why markets are rallying today?

Why are markets rising today: Indian benchmark indices started May on a strong note, extending gains after a volatile April, supported by global cues on potential US-China trade talks that could ease concerns over a global trade war.

 

The BSE Sensex index zoomed 931 points intraday to hit a high of 81,173, while the Nifty50 index surged 255 points to a high of 24,589.  However, the markets gave up gains and traded flat in the latter part of the session. As of 1:30 PM, Sensex was up 0.12 per cent higher at 80,336, while the Nifty50 was 0.13 per cent up at 24,367.  

 

 

In the broader markets, the Nifty MidCap index and the Nifty SmallCap index were trading with declines after rising about 1 per cent during the day. Twelve out of 20 sectors on BSE advanced, with Oil and Gas and Information Technology being among the top gainers.  By midday, the market breadth was skewed in favour of the sellers. About 1,821 stocks rose, 1,989 declined, while 168 remained unchanged on the BSE.

 

“Our markets have witnessed a sustained upmove in recent weeks, retracing 61.8 per cent of the previous correction from 26,277 to 21,750,” said Ruchit Jain, Head of Technical Research at Motilal Oswal. “The index is now approaching a key resistance zone, and the next move will be crucial. Overall, the setup remains favourable for equities, with the Dollar Index consolidating near 100, foreign institutional investors (FIIs) turning buyers, and the Indian rupee gaining strength.” 

 

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Why are markets rising today? Key reasons behind the Sensex, Nifty rally today:

 

US-China trade talks: The rally in the domestic stocks kicked off after equities in Asian markets rose, as signs of possible trade talks between the US and China lifted risk sentiment. China's commerce ministry said its door is open for trade talks and has repeatedly expressed its willingness to negotiate on tariffs with the US. Reuters reported, quoting the commerce ministry, that the US should be prepared to take action to correct "erroneous" practices and cancel unilateral tariffs. 

 

Earlier this week, Treasury Secretary Scott Bessent said it’s up to Beijing to take the first step to de-escalate the dispute.

 

Futures for the S&P 500 rose 0.72 per cent while those for the Nasdaq were 0.5 per cent higher. Japan's Nikkei gained 1.04 per cent on a weaker yen, and Taiwan stocks surged 2 per cent. Overnight, the S&P 500 rose for eight straight sessions, to mark its longest winning streak since August, as tensions on the trade war front eased.  

 

FIIs extend buying spree: Global investors continued their buying in Indian equities for the 11th straight day on Wednesday, after months of record outflows. FIIs bought shares worth ₹5,057 crore during the previous session, while DIIs net bought equities worth ₹1,792.15 crore. In the 11 days of buying the, FIIs have bought stock worth ₹42,416 crore. 

 

The market’s “surprising” resilience has largely been driven by sustained foreign institutional investor (FII) buying, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He attributed the FII interest to a weaker dollar and slowing growth in the US, adding that supportive domestic factors, such as falling interest rates, lower crude prices, and early signs of demand recovery, are also boosting market sentiment. 

 

Indian Rupee slips under 84/$: The sentiments were further boosted as the Indian currency extended its rally on Friday, breaching the 84 mark against the US dollar to hit a seven-month high. 

 

The domestic currency appreciated 71 paise to 83.78 against the greenback, after opening at 84.09 on Friday. The current logged its best single-day gain in nearly two-and-a-half years in the last session to close at a five-month high. After hitting a record low of 87.95 per dollar on February 10, 2025, the Indian rupee rebounded, gaining 2 per cent in March and 1.16 per cent in April.

 

Key technical levels to watch: The immediate support for Nifty is placed around 24,200, followed by strong support around 23,800, according to Motilal Oswal's Jain. On the higher side, if Nifty manages to sustain above 24,550 (61.8 per cent retracement level), then it could extend towards 24,900-25,000, he said.