After weeks of sideways movement and nervous global cues, Dalal Street witnessed a broad-based rally on Thursday morning. The BSE Sensex jumped over 500 points, crossing the 83,000 mark for the first time this year. The Nifty50 also surged past 25,400 in early trade, supported by easing geopolitical tensions and renewed global risk appetite.
By 9:59 am, the Sensex was up 549 points at 83,305.06, and the Nifty gained 172.75 points to 25,417.50. The broader market sentiment was positive, and volatility remained surprisingly low.
Key Drivers of the Rally
The primary trigger was easing tensions between Israel and Iran, which helped restore investor confidence globally. Dr. VK Vijayakumar of Geojit Financial Services said global markets are now in a "risk-on" mode. However, he warned that the momentum might not last if the ongoing trade tariff pause ends without resolution after July 9.
He added that a potential India-US trade agreement could boost sentiment, while any setbacks could limit further gains.
Domestic factors also played a role. The Reserve Bank of India’s latest bulletin reaffirmed India’s economic strength. Lower crude oil prices—around $65.50 per barrel—and strong overnight cues from Wall Street, where the S&P 500 is near record highs, also lifted investor morale.
Prashanth Tapse of Mehta Equities described the move as a breakout. With Nifty near its all-time high of 26,277.35, he sees further upside ahead. His targets are 25,319 and 25,500, with strong support around 25,000.
Financial and metal stocks led sectoral gains. Stock-specific action was seen in Vodafone Idea, Lupin, Prestige Estate, Indus Tower, and M&M. Bank Nifty also showed strength.
Concerns Over Valuations
Despite the optimism, valuation concerns persist. Dr. Vijayakumar noted that Indian equities are trading at over 22 times projected FY26 earnings—well above the Hang Seng’s PE of 15. This could prompt foreign investors to rotate money from India to cheaper markets like China. However, domestic investors with abundant liquidity may offset these outflows.
On the technical front, the rally still has momentum. Akshay Chinchalkar of Axis Securities said Wednesday’s 200-point Nifty jump indicates short-term bullishness. However, the “inside-day” chart pattern suggests a large move is coming soon, but its direction is unclear.
He sees resistance at 25,310–25,360 and stronger resistance near 25,500. Key support zones lie between 24,960–25,010 and deeper at 24,800. A bullish defense of these levels could push Nifty toward 25,800.
Looking Ahead
The market’s rise reflects renewed confidence, but risks remain. Geopolitical tensions and unresolved trade issues could quickly change the narrative. High valuations also warrant caution as global investors search for better value.
The Sensex’s leap past 83,000 is encouraging, but it remains to be seen whether this is the beginning of a sustained rally or just a temporary bounce.
