Sensex, Nifty soar amid positive global cues and banking stock rally

Indian equity markets witnessed a strong surge on Tuesday, 18 March as benchmark indices Sensex and Nifty registered impressive gains, driven by positive global trends and robust buying interest in banking stocks.

The BSE Sensex jumped 900.69 points, or 1.21 per cent, to touch an intraday high of 75,070.64, while the broader NSE Nifty climbed 265.1 points, or 1.17 per cent, to reach 22,773.85.

ICICI Bank, Zomato, Mahindra & Mahindra, Tata Motors, Larsen & Toubro, Hindustan Unilever, Power Grid and Adani Ports were major gainers that significantly contributed to the rally.

Analysts attributed the rally to a combination of favourable global cues, value buying, improving macroeconomic indicators, and a stronger rupee. Positive trends in global equities lifted investor sentiment, as key indices on Wall Street extended gains for the second consecutive session on Monday, 17 March.

The Dow Jones Industrial Average rose 353.44 points, or 0.85 per cent, to 41,841.63, while the S&P 500 added 36.18 points, or 0.64 per cent, to 5,675.12. The Nasdaq Composite also posted gains, rising 54.58 points, or 0.31 per cent, to 17,808.66. Major Asian markets, including Seoul, Tokyo, Shanghai and Hong Kong, followed suit, trading in the green.

Investors also sought bargains after the recent market correction, leading to buying across sectors. The Nifty Bank index surged past the 49,000 mark, signalling renewed confidence. V.K. Vijayakumar, chief investment strategist at Geojit Financial Services, noted that broad indications suggest the market has bottomed out, although further corrections cannot be ruled out.

Adding to the positive momentum, India’s trade deficit fell to its lowest level in 3.5 years, while GDP growth for Q3 FY25 rebounded to 6.2 percent.

Industrial output (IIP) rose by 5.1 percent, gross tax collections increased by 16 per cent, and retail inflation eased to 3.6 percent, providing a favourable backdrop for the rally.

The strengthening of the rupee also contributed to the upbeat sentiment, as it appreciated by 10 paise to 86.71 against the US dollar in early trade. On Monday, the rupee had gained 24 paise to close at 86.81.

Market sentiment was further boosted by China’s stimulus measures to promote consumption and stronger-than-expected retail sales and fixed asset investment growth. These developments lifted hopes of increased demand for metals, leading to gains in domestic metal manufacturing stocks.

Anand James, chief market strategist at Geojit Financial Services, said the market's upward momentum was consistent with expectations, despite resistance at the 22,580 mark. He noted that the ‘piercing candle’ formation supports further gains, with an initial target of 22,750, while downside support is now positioned at 22,470.

The broader market also mirrored positive trends, with mid and smallcap indices gaining 1.2 per cent and 1.6 per cent, respectively. Despite the day's performance, the indices are still down 15 per cent and 20 per cent, respectively, on a year-to-date basis.

Investors are now closely monitoring the Bank of Japan’s two-day monetary policy meeting too, which commenced on Tuesday. The central bank is widely expected to maintain interest rates at 0.5 per cent when the meeting concludes on Wednesday, 19 March.

Experts cautioned that while the current rally reflects strong sentiment and renewed investor confidence, the market could still witness volatility in the days ahead.

As global factors continue to influence the domestic market, investors are advised to approach trading with caution.