Indian stock markets have witnessed a sharp rally over the past four trading sessions, with benchmark indices Sensex and Nifty surging more than 6%, adding ₹25.77 lakh crore to investors’ wealth.
A temporary halt on tariffs by the United States has eased global trade concerns, boosting investor sentimen. After a prolonged selling streak, foreign portfolio investors have returned, purchasing over $1 billion worth of Indian equities in the last three trading sessions. The India Meteorological Department (IMD) has predicted above-normal rainfall for the upcoming southwest monsoon season, raising hopes for a strong agricultural output.
Inflation has dipped to a six-year low of 3.34%, increasing expectations of further interest rate cuts by the Reserve Bank of India (RBI).
On April 9, the RBI cut the repo rate by 25 basis points to 6%, marking its second consecutive rate cut. The central bank also shifted its policy stance from neutral to accommodative, signalling the possibility of further rate reductions. Experts believe the rally was fueled by optimism surrounding tariff deferrals, monsoon forecasts, and easing inflation. However, investors will closely watch corporate earnings reports and global trade developments in the coming weeks.
