Sensex Rallies 750 Points, Nifty Crosses 22,500 as Markets React to China Stimulus Hopes and Global Cues

Stock Market Surges on Global Optimism and RBI Liquidity Measures

Mumbai: Indian equity markets saw a sharp rebound on Thursday, with the Sensex climbing 750 points from the day’s low and the Nifty 50 reclaiming the crucial 22,500 mark, driven by strong global cues, hopes of additional stimulus from China, a weaker U.S. dollar, and a decline in crude oil prices.

At 1:45 PM, the BSE Sensex surged to trade significantly higher, while the NSE Nifty 50 strengthened past the psychological barrier of 22,500. Market sentiment improved after Wall Street posted strong gains overnight, crude oil prices eased, and China hinted at further economic stimulus to counter trade tensions with the U.S.

Key Factors Behind the Market Rally

1) China Stimulus Hopes Boost Investor Confidence

Markets in India and across Asia reacted positively to expectations of additional economic stimulus from China, aimed at supporting consumption and mitigating pressure from the ongoing trade war with the U.S.. This optimism led to a sharp rise in metal stocks, pushing the Nifty Metal Index up by nearly 2% during the session.

“Base metals rallied in Asian trade on the prospect of further China stimulus measures,” said Daniel Hynes, Senior Commodity Strategist at ANZ Bank, in an interview with Reuters.

2) Strong Global Cues Drive Market Optimism

Asian equities mirrored a robust rally on Wall Street, following U.S. President Donald Trump’s decision to soften his stance on tariffs for Mexico and Canada, granting a one-month exemption.

• South Korea’s Kospi climbed 0.7%
• Hong Kong’s Hang Seng surged by over 3%
• S&P 500 jumped 1.1% to 5,842.63
• Dow Jones Industrial Average rose 1.3% to 43,006.59
• Nasdaq Composite advanced 1.46% to 18,552.73

In addition, China’s manufacturing PMI data came in stronger than expected, boosting overall market sentiment.

3) Weaker Dollar Index Favors Emerging Markets

The U.S. Dollar Index slipped to a four-month low of 104.3, which is positive for emerging markets like India. A weakening dollar often leads to stronger capital inflows, reducing Foreign Institutional Investor (FII) selling pressure on Indian equities.

“If this trend continues, we expect FII outflows to subside, paving the way for further market gains,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

4) Crude Oil Prices Drop to a Six-Month Low

Crude oil prices continued their downward trend, providing relief to Indian markets. Brent crude fell below $70 per barrel, marking a six-month low, after the OPEC+ alliance announced increased production from April.

This development benefits Indian oil refiners and oil marketing companies (OMCs) by improving margins on retail fuel sales. The decline in crude prices also eases inflationary concerns, which can further support economic growth and corporate profitability.

“The ongoing trade war between the U.S. and China has raised concerns about global demand, adding downward pressure on oil prices,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.

5) RBI’s Liquidity Measures Fuel Market Confidence

The Reserve Bank of India (RBI) continues to provide liquidity support to the banking system. Recently, the central bank conducted a $10 billion swap to boost long-term liquidity, in addition to announcing open market purchases of government securities worth Rs 1.9 lakh crore.

These measures have helped stabilize the rupee, ease credit availability, and support market sentiment.

Technical Outlook: Market Momentum Remains Strong

Market experts are bullish on Nifty’s prospects, indicating that the index is forming a strong reversal pattern.

“Nifty’s close above 22,400 has confirmed a morning star candlestick pattern, which is a strong bullish signal,” said Anand James, Chief Market Strategist at Geojit Financial Services.

• Immediate resistance is seen at 22,513, with potential for a rally toward 23,000
• Key support levels to watch: 22,270 and 22,190
• A break below 22,190 could challenge the ongoing bullish momentum

Indian Markets Poised for Further Gains?

With China’s stimulus expectations, positive global cues, a weaker U.S. dollar, lower crude oil prices, and RBI’s liquidity measures all supporting market sentiment, Sensex and Nifty could sustain their upward trajectory.

However, volatility risks remain, as investors await further clarity on global economic policies, trade developments, and central bank actions. Market analysts advise investors to remain cautious, tracking global trends and domestic macroeconomic indicators before making major investment decisions.

Outlook for Investors

• Short-term traders can capitalize on the bullish momentum but should be mindful of volatility
• Long-term investors may consider selective stock accumulation, focusing on sectors benefiting from global tailwinds
• Sectoral focus: Metals, Oil & Gas, and Banking are expected to outperform in the near term

With market optimism running high, investors are watching closely for further policy announcements from the RBI and the Indian government to determine the sustainability of this rally.