The Indian stock market started the week on a positive note, with key benchmark indices continuing the upward trend from the previous session. Positive global cues, renewed foreign fund inflows, and expectations of interest rate cuts by the US Federal Reserve next year collectively boosted investor sentiment.
At around 9:50 am, the Sensex surged 492.04 points (0.58%) to 85,421.40, while the Nifty climbed 165.90 points (0.64%) to trade above 26,100 at 26,132.30. The broader market showed a healthy breadth, signaling sustained optimism among investors.
Market Performance Snapshot
- Sensex: 85,421.40 (+492.04 points, +0.58%)
- Nifty 50: 26,132.30 (+165.90 points, +0.64%)
- Market Breadth: 2,487 stocks advanced, 911 declined, 200 unchanged
Top Gainers:
- Shriram Finance: up to 4%
- Infosys: up to 4%
- Wipro: up to 4%
Top Laggards:
- UltraTech Cement: down 0.3%
- SBI Life Insurance: down 0.3%
Factors Behind the Market Rally
Several key elements fueled the strong market performance on Monday:
1. Foreign Fund Inflows
Foreign Institutional Investors (FIIs) returned as net buyers after 14 consecutive sessions of selling. On Friday alone, FIIs purchased equities worth ₹1,830.89 crore, bringing their total buying over the last three sessions to around ₹3,776 crore.
The inflows from FIIs, combined with steady participation from domestic investors, added momentum to the market, boosting overall investor confidence.
2. Expectations of US Fed Rate Cuts
Markets are pricing in the likelihood of two interest rate cuts by the US Federal Reserve in 2026. Recent US economic data, which failed to significantly alter policy outlook, further strengthened hopes for a softer monetary stance.
These expectations provided an additional push to sectors sensitive to interest rates, especially IT stocks.
3. Positive Global Cues
Asian indices traded higher, supporting domestic equities:
- South Korea’s Kospi: up
- Japan’s Nikkei 225: up
- Shanghai SSE Composite: up
- Hong Kong’s Hang Seng: up
US markets also closed higher on Friday, with US futures trading up to 0.3% in early Asian hours, signaling a positive start for Wall Street and further influencing Indian market sentiment.
4. Rupee Appreciation
The rupee strengthened by 22 paise to 89.45 against the US dollar in early trade.
A stronger rupee generally helps equities by easing imported inflation concerns and improving investor sentiment, particularly among foreign investors.
5. IT Sector Rally
Shares of IT companies led the gains on the Nifty, pushing the Nifty IT index into the green for the fourth consecutive session. Key contributors included Infosys and Wipro, benefiting from:
- Rising hopes of US rate cuts
- Positive movement in Infosys ADRs
The sector’s momentum reflects strong market confidence in technology stocks amid global cues.
6. RBI Policy Meeting Minutes
The Reserve Bank of India’s December policy meeting minutes highlighted:
- Potential moderation in economic growth in 2026
- Subdued inflation levels
These factors indicate possible room for future policy easing, supporting investor sentiment in domestic equities.
Company Highlights
- Shriram Finance, Infosys, Wipro: Significant gainers, rising up to 4%
- UltraTech Cement, SBI Life Insurance: Slight declines up to 0.3%
The gains were broad-based, with strong participation across multiple sectors, reflecting optimism across the market.
Summary
The Sensex and Nifty extended their upward momentum on Monday, driven by foreign fund inflows, US Fed rate cut expectations, positive global cues, rupee appreciation, and robust IT stock buying.
- Sensex gained 492 points, crossing 85,400
- Nifty surged past 26,100
- Positive market breadth with over 2,400 advancing stocks
Investor sentiment remains upbeat as global trends, policy expectations, and foreign inflows align to support domestic equities.
The rally demonstrates a healthy market environment, with key sectors participating and benchmark indices showing resilience.
Source: Moneycontrol
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