A mix of global rate-cut optimism, resilient domestic demand and improving market sentiment is sending Indian stock indices to fresh all-time highs.
Our Bureau
Mumbi
Indian equities have surged to historic levels this week, with both the Sensex and Nifty posting strong gains as global and domestic cues aligned to fuel a broad-based rally. The benchmark indices, which had opened weak earlier in the week, rebounded sharply amid renewed buying interest, driven by expectations of impending rate cuts by both the US Federal Reserve and the Reserve Bank of India (RBI).
On Wednesday, the Sensex closed at 85,609.51 points, up 1,022.50 points or 1.21 per cent, while the Nifty settled at 26,205.30, rising 320.50 points or 1.24 per cent. According to market experts, much of this rally stems from growing belief that global central banks — led by the Fed — will begin loosening monetary policy sooner than expected.
“Indian markets staged an impressive rally, reflecting sharp risk-on sentiment across global equities,” said Ponmudi R, CEO of Enrich Money. He noted that softening US retail sales and producer price data have strengthened expectations of a Federal Reserve rate cut in December. Cooling inflation in the world’s largest economy has eased pressure on emerging markets and revived appetite for risk assets.
Sectorally, the rally has been all-encompassing. Metal, consumer durables, and oil and gas stocks led the uptrend, with all NSE sectoral indices closing in the green. According to Vinod Nair, Head of Research at Geojit Financial Services, the upsurge also reflects what he described as a festive-season “Santa Claus rally” in global markets. “Robust retail and domestic institutional investor inflows have supported the market, even as FII participation remains modest,” he said.
Domestic sentiment has also received a boost from expectations that the RBI may follow the Fed in easing interest rates. Analysts widely anticipate a 25-basis-point reduction in the December monetary policy review, citing moderating inflation and a dovish tilt in recent RBI communications. A potential rate cut, combined with robust domestic liquidity, is seen as a major positive for equity valuations.
Thursday’s session added further momentum, with the Nifty hitting a fresh record of 26,285.95 — its first new peak in 14 months. The Sensex climbed as high as 85,843.82 in early trade. Investors remained aggressively optimistic, reversing last month’s cautious mood and signalling a strong revival in bullish sentiment.
Ajay Bagga, a banking and market expert, said the markets are now well-positioned to reclaim and build on the all-time highs recorded in September 2024. “A decisive close above those levels opens the way for a rapid catch-up. Historically, after a period of relative underperformance, Indian markets deliver strong returns over the next 12 months,” he said. Bagga added that expectations of corporate earnings recovery in the next two quarters — combined with a supportive fiscal stance and improving consumption — are strengthening the medium-term outlook.
The technical picture also remains robust. Nifty’s sustained movement above support zones and its pattern of forming higher lows signals persistent underlying strength, said Ponmudi R. “A strong close above 26,277 can trigger a move toward 26,350–26,500, with a possible extension toward 27,000 in the short term,” he said, adding that immediate support lies at 26,100–26,000.
Global markets have amplified the bullish mood. Despite recent weakness in AI stocks, US indices have advanced on hopes of softer monetary policy. Asian markets — including Japan’s Nikkei, Taiwan’s Weighted Index, Singapore’s Straits Times and South Korea’s KOSPI — also traded higher, reflecting broad confidence across the region. Falling crude oil prices, driven by renewed diplomatic efforts between Ukraine and Russia, further strengthened India’s macro environment.
Together, these forces — strong domestic inflows, improving policy visibility, favorable global cues and expectations of a renewed earnings cycle — have created a potent combination that is propelling Indian markets to new records. With sentiment turning decisively positive, investors and analysts alike believe the rally may just be getting started.
