Equity Markets Rally for Fourth Straight Session, IT Stocks Lead Gains
Mumbai, India – Indian equity benchmarks extended their winning streak for the fourth consecutive session on Thursday, March 21, as global market optimism and a dovish stance by the US Federal Reserve boosted investor sentiment.
The BSE Sensex surged 564.77 points or 0.74%, hitting an intraday high of 76,013.82, while the NSE Nifty advanced 163.5 points or 0.71% to reclaim the 23,071.10 level. The rally was led by IT heavyweights, with the Nifty IT index climbing 2.2% in early trade.
Factors Driving Market Gains
1) Federal Reserve’s Dovish Stance on Inflation and Tariffs
Investor confidence improved after US Fed Chair Jerome Powell reassured markets that the impact of tariffs on inflation will likely be temporary. Powell also downplayed recession risks, stating that they remain “not high”, which eased investor concerns over aggressive rate hikes.
- Fed’s Rate Cut Projections Remain Intact: Powell reaffirmed that the central bank remains open to rate cuts later in 2025, helping markets maintain their positive momentum.
- Impact on Global Equities: US and global stock indices rallied in response, providing a strong backdrop for Indian markets.
Christian Hoffmann, Portfolio Manager at Thornburg Investment Management, commented, “Markets will read this as a slightly dovish stance, with the Fed not overly concerned about an economic slowdown or inflation. Both stocks and bonds reacted positively.”
2) IT Stocks Propel Market Gains
The biggest contributors to the rally were technology stocks, as the Nifty IT index jumped 2.2% in early trade. Among the top Nifty gainers:
- Wipro (+3%)
- Infosys (+2.8%)
- Tata Consultancy Services (TCS) (+2.7%)
Other leading gainers included Bharti Airtel and Eicher Motors, further lifting benchmark indices.
3) Strength in Domestic Consumption and Beaten-Down Sectors
- Banking and Financials: Strong investor interest continued in stocks such as Kotak Mahindra Bank, Bajaj Finance, InterGlobe Aviation, and Muthoot Finance, which hit new 52-week highs.
- Revival in Defense and Shipping Sectors: Previously beaten-down themes like defense and shipping stocks saw renewed buying interest, adding to the market momentum.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “Consumer-facing digital stocks remain on a strong footing, and the revival of defense and shipping stocks further strengthens the bullish trend.”
4) Strong US Market Cues and Global Sentiment Boost
The overnight rally in US markets provided a positive global backdrop for Indian equities.
- Dow Jones Industrial Average rose 383.32 points or 0.92% to 41,964.63.
- S&P 500 gained 60.63 points or 1.08%, closing at 5,675.29.
- Nasdaq Composite advanced 246.67 points or 1.41%, settling at 17,750.79.
US stock futures remained positive, with Nasdaq and S&P 500 futures inching up 0.4% and 0.3%, respectively.
However, Asian markets showed mixed trends, with:
- Japan’s Nikkei 225 down 0.40%
- China’s CSI 300 slipping 0.46%
- Hong Kong’s Hang Seng Index falling 1.5%
Market Strategy
Market analysts expect volatility in the near term, with key support and resistance levels guiding investor sentiment.
Anand James, Chief Market Strategist at Geojit Financial Services, projected that:
- If Nifty breaks below 22,800, it could signal a larger corrective move.
- Resistance levels are identified in the 23,460–23,500 zone, with 23,807 as the next target.
With strong global cues, sectoral leadership from IT, and positive domestic trends, Indian markets remain positioned for continued bullish momentum, although investors remain cautious of global economic uncertainties.
