The Indian stock market has made a significant recovery, with both the Nifty 50 and Sensex rising by up to 9% from their lows on April 7. The rally has been fueled by a combination of easing trade tensions, strong domestic inflows, and a positive sentiment driven by a cooling of inflation. The financial sector has led the recovery, benefiting from the RBI’s rate cuts and improving conditions.
In just four days, the Sensex surged by over 4,300 points, with the Nifty 50 gaining 1,350 points. The rally continues despite ongoing global trade uncertainties, with US President Donald Trump’s pause on some tariffs boosting market confidence.
Analysts are cautiously optimistic but warn that potential risks—such as muted earnings expectations for the March quarter and possible tariff announcements by the US—could dampen further gains. The broader markets are also experiencing growth, with the Nifty Midcap 100 gaining 11.45% and the Nifty Smallcap 100 rising 16% since April 7.
The market’s strong recovery has also been supported by a surge in overseas investments, with FPIs purchasing significant amounts of Indian stocks in recent sessions. While the rally could face challenges ahead, sectors like financials, telecom, and consumption are hitting record highs, and experts predict that the Indian market may continue to outperform in the near future.
However, analysts urge caution and suggest potential profit booking at higher levels, especially with the subdued earnings outlook for Q4 FY25.
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