Dalal Street Rallies as Nifty and Sensex Exit Correction Territory
The Indian stock market continued its bullish run, with the Nifty 50 and Sensex logging their sixth consecutive session of gains on March 24, 2025. This rally has officially lifted both indices out of correction territory, signaling renewed investor confidence in banking and IT stocks.
During the session, the Nifty 50 crossed the critical 23,500 mark, while the Sensex soared by over 1,100 points, recovering from previous losses. With these gains, the Nifty has turned positive for the year, while the Sensex still remains marginally negative year-to-date.
Benchmark Indices See Strong Gains
At the closing bell:
Sensex surged 1,131.93 points (1.47%) to 78,037.44
Nifty 50 climbed 328.25 points (1.41%) to 23,678.65
Market sentiment remained strongly positive, with 2,389 stocks advancing, 1,582 declining, and 155 remaining unchanged.
Despite the upward momentum, market volatility increased, as indicated by the India VIX index, which ended 9% higher at 14 levels.
Factors Driving the Market Rally
Several macroeconomic and technical factors have fueled the recent rally, including:
Stronger global cues and easing concerns over geopolitical risks
A stronger rupee, which has supported foreign inflows
Foreign Institutional Investors (FIIs) turning net buyers after a month of continuous selling
Robust domestic economic growth and expectations of an RBI rate cut
Attractive valuations following a prolonged correction
Reversal in Foreign Portfolio Investor (FPI) Selling
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributed the market’s strength to the reversal of FPI selling, driven by factors such as:
Easing inflation concerns
Weaker US dollar
Improved global market sentiment
Similarly, Mahendra Patil, Managing Partner at MP Financial Advisory Services, highlighted the market’s strongest weekly gain in four years, citing:
Renewed foreign inflows
Strong domestic institutional participation
India’s long-term structural growth story
According to Patil, favorable demographics, ongoing economic reforms, and rising consumption potential are boosting investor sentiment, making Indian equities an attractive long-term investment.
Sectoral Performance: Banks and IT Stocks Dominate
All 13 sectoral indices ended the session with sharp gains, reinforcing the broad-based nature of the rally.
Banking Sector Outperforms
Nifty Bank, Nifty PSU Bank, and Nifty Private Bank surged 2-3%
Top gainers included Kotak Mahindra Bank, Axis Bank, and SBI
HDFC Bank, ICICI Bank, and IndusInd Bank also saw strong buying interest
Analysts noted that investors are increasing exposure to large-cap banks, which still offer reasonable valuations and strong growth potential.
IT Stocks Stage a Rebound
TCS, Tech Mahindra, Wipro, and HCLTech surged 2-4%
The IT sector benefited from receding concerns over global slowdown and improved earnings expectations
Other Sectoral Highlights
Nifty Realty, Nifty Energy, and Nifty Auto rose 1-2%
Reliance Industries Ltd (RIL) gained over 2%, lending major support to the indices
Nifty 50 Nears Key Resistance
Anand James, Chief Market Strategist at Geojit Financial Services, stated that Nifty 50 is approaching the upper end of its current trading range (23,450-23,807).
Key technical observations:
The index has remained above the upper Bollinger Band for three consecutive sessions
However, only 60% of Nifty 50 stocks have crossed their upper bands, signaling potential for new market leaders
James cautioned that if Nifty 50 fails to break past the 23,500 zone or closes below 23,300, a downside move toward 23,160 could be triggered.
