Why did Sensex rally 1,950 pts from day's low on Thursday; key reasons here

Renewed buying by FIIs, coupled with short-covering on hopes of likely trade deals with the US fueled today's market rally, say analysts. The Sensex reclaimed 78,500-mark, and Nifty topped 23,850.

The Indian equity benchmark indices, the Bombay Stock Exchange (BSE) Sensex and the National Stock Exchange (NSE) Nifty 50 staged a strong rebound from lows of the day in Thursday's intra-day trades, and were seen quoting higher for the fourth straight day.  The Sensex and the Nifty, both, had started the day on a jittery note amid tepid cues from global markets owing to the on-going US-China tariff tussle, and the US Federal Reserve chair Jerome Powell warning on potential consequences on the economy from tariffs.  The BSE Sensex opened 76 points lower at 76,868, and soon slipped to a low of 76,666. The BSE benchmark thereafter recouped losses, rallied sharply to an intra-day high of 78,617 - up 1,951 points from the day's low. The Sensex finally closed at 78,553 - up 1,509 points or 2 per cent.    Similarly, the NSE Nifty 50 index rebounded from the day's low of 23,299, and soared to a high of 23,872. The Nifty settled with a gain of 414 points or 1.8 per cent at 23,852. Read Market Highlights Here   "India's recent outperformance is striking. We are the only large market which has erased all losses incurred after April 2, 2025", highlights V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.  India has outperformed because its a domestic consumption driven economy will be one of the least impacted by the tariff crisis, believes Vijayakumar.  Further the analysts add that the market is discounting the possibility of a bilateral trade agreement between US and India within a few months. The US regards India as among the four allies (UK, Japan, South Korea and India) with whom the US will strike trade deals first.  In the market today, the recovery was predominantly led by financial shares, with private banking majors - HDFC Bank and ICICI Bank contributing nearly 50 per cent of the day's gain on the Sensex and Nifty. Buying in banking shares also propelled the Bank Nifty to a 4-month high.  That apart, Reliance Industries and Bharti Airtel were the top movers on the Sensex and Nifty; whereas stocks such as Eternal (formerly known as Zomato), Sun Pharma, Adani Ports, Tata Consumer, Grasim and Trent were the other major gainers.  Here are the key reasons that led the market rebound on Thursday  Short-covering fuels up move  Analysts believe that the stock markets were oversold given the sustained fall in the last few months. However, the recent news flow around possible easing of global trade war has triggered some short-covering.  The markets now offer a more favorable risk-reward setup in select sectors, following a correction that started in October 2024. Fresh buying by Foreign Institutional Investors (FIIs) in the past few sessions, coupled with short covering in index futures, has further fueled the uptrend, says Ruchit Jain, head of technical research at Motilal Oswal.  Indian markets are expected to remain relatively resilient, potentially paving the way for sustained momentum. From a technical perspective, the immediate resistance for Nifty is placed in the 23,800–23,900 zone. A decisive breakout above this range could open the door for further upside and reinforce the ongoing positive sentiment, Ruchit added.  Bank stocks lead the charge  Banking shares - mainly the private banking major - ICICI Bank and HDFC Bank were the key drivers of the market rally today. Both ICICI Bank and HDFC Bank hit new life-time highs in intra-day deals backed by heavy volumes. The former surged over 3 per cent to ₹ 1,400 levels, while the latter gained 1.5 per cent at ₹ 1,910. ICICI Bank stock today crossed the ₹ 10 trillion mark in market capitalisation. ICICI Bank and HDFC Bank are scheduled to announce Q4 results on Saturday, April 19, 2025.  That apart, SBI surged over 4 per cent. Kotak Mahindra Bank, Axis Bank, Canara Bank and Yes Bank were up 1 - 3 per cent each.    FIIs resume buying Indian shares  Foreign Institutional Investors (FIIs) turned net buyers of stocks in the cash market for the last two trading sessions. FIIs net bought shares worth Rs 10,000 crore in the last two days, including its third biggest single-day buy of the calendar year on Tuesday. READ MORE  US-China trade tensions  The US President Donald Trump has threatened to levy up to 245 per cent tariff on China imports. The move follows China's announcement of up to 84 per cent tariffs on US goods. Both countries are engaged in a tit-for-tat battle on the trade front.  Earlier this month, Trump after announcing reciprocal tariffs across nations, took a step-back and set a 90-day pause on additional tariffs to most countries, excluding China. Analysts believe that the on-going US-China tariff war could weigh in favour of Indian companies.