Bull Run Continues! Sensex Gains 400 Points, Nifty Hits 22,200 on Growth Optimism

Indian stock markets opened on a strong note on Monday, tracking positive cues from other Asian markets. Both benchmark indices, the BSE Sensex and NSE Nifty, started the trading session higher, driven by gains in key sectors such as information technology (IT) and automobile stocks.

Investor sentiment was further boosted by the latest economic data released on Friday, which revealed that India’s economy grew by 6.2% in the October- December quarter. The growth was primarily supported by increased government spending and a rise in consumer demand, signaling resilience in the economy despite global uncertainties.

The upbeat market opening reflects optimism among investors as they react positively to the encouraging domestic economic indicators and favorable trends in Asian markets.

By 9:21 AM, Indian stock markets were trading in positive territory, with the BSE Sensex climbing 428 points, or 0.58%, to reach 73,625. Similarly, the Nifty50 index gained 134 points, or 0.6%, standing at 22,258.

Among the top gainers in the Sensex pack were UltraTech Cement, Mahindra & Mahindra (M&M), Larsen & Toubro (L&T), Infosys, Tech Mahindra, and Power Grid, all of which saw early gains of 1-2%. These stocks contributed to the market’s upward momentum, reflecting investor optimism in select sectors.

However, not all stocks opened on a positive note. Financial stocks such as IndusInd Bank, Axis Bank, Bajaj Finserv, and Bajaj Finance, along with FMCG major Hindustan Unilever (HUL), saw declines in early trade. Despite the mixed performance among individual stocks, the broader market trend remained positive in the opening session.

The Nifty Auto index witnessed a strong start, rising by 0.8% in early trade, driven by positive momentum in auto stocks following better-than-expected February sales figures. Leading the gains in the sector were TVS Motor, Mahindra & Mahindra (M&M), and Eicher Motors, as investors reacted to the robust sales performance reported by these companies.

M&M, in particular, reported a notable 14.8% year-on-year increase in its total automobile sales, reaching 83,702 units in February. This growth was primarily fueled by an 18.9% surge in passenger vehicle sales, which rose to 50,420 units. The strong demand for passenger vehicles contributed significantly to the company’s overall sales growth, reflecting steady consumer interest in the automobile segment.

The positive sentiment in the auto sector, supported by strong sales data, helped boost the broader market as investors remained optimistic about the industry’s growth prospects.

Shares of Paytm saw a sharp decline at market opening, dropping over 4% after the Enforcement Directorate (ED) issued a show-cause notice to the company and two of its subsidiaries. The notice was related to alleged violations of foreign exchange regulations amounting to ₹611 crore.

The ED’s action has raised concerns among investors, leading to a negative reaction in the stock. The regulatory scrutiny comes as part of an investigation into potential breaches of forex rules, adding to the recent challenges faced by the company. As a result, market participants are closely monitoring developments surrounding the case and its potential implications for the company’s operations.

Foreign Institutional Investors (FIIs) have been consistently selling in the Indian stock market, primarily due to concerns over high valuations and the appeal of U.S. bond yields as an alternative investment. However, according to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, these macroeconomic factors are gradually shifting, which could influence FII activity in the coming days.

One of the key changes is the moderation in large-cap stock valuations, which are now considered more reasonable. In certain sectors, such as financial services, valuations appear particularly attractive. At the same time, U.S. bond yields, which had previously drawn significant foreign capital away from emerging markets, have started to ease. The 10-year U.S. Treasury yield has now come down to 4.21%, potentially making equities a more competitive investment option once again.

Given these evolving dynamics, Dr. Vijayakumar suggests that the intensity of FII outflows from India could reduce in the near future. However, the extent of this shift will depend on how global interest rates and market conditions continue to evolve.

Dr. V K Vijayakumar further highlighted that India’s economic growth trajectory is showing signs of a cyclical recovery, which could have a positive impact on market sentiment. He pointed out that the country’s GDP growth rate improved from 5.6% in the second quarter (Q2) to 6.2% in the third quarter (Q3), reflecting an upward trend in economic activity.

Moreover, projections indicate that GDP growth in the fourth quarter (Q4) could surpass 7%, signaling a steady recovery in key sectors of the economy. This acceleration suggests strengthening domestic demand, improving business conditions, and increased investment activity—all factors that generally contribute to a favorable environment for financial markets.

As economic momentum builds, market participants are likely to monitor these growth trends closely, assessing their potential impact on corporate earnings and overall market performance.

Hardik Matalia, Derivative Analyst at Choice Broking, provided insights into key levels that could influence Nifty’s movement in the near term. According to him, the index is currently facing a significant resistance level at 22,300. If Nifty manages to break above this threshold, it could pave the way for further upward momentum, with potential targets at 22,530 and 22,670.

On the downside, Matalia pointed out that immediate support for the index is positioned at 21,929. This level is considered crucial for the broader monthly trend, as a sustained hold above it could indicate market stability. However, if Nifty fails to maintain this support and breaks below 21,929, the index may witness further weakness, with the next key support level at 21,718.

Given the current market conditions, he noted that Nifty is at a critical juncture, where holding or breaching these levels could determine its short-term direction. Market participants are expected to closely watch these technical indicators to assess potential trends and volatility in the index.

Asian stock markets started the week on a cautious note, posting modest gains on Monday as investors remained watchful ahead of potential tariff decisions that could impact global trade sentiment. While the overall mood was one of caution, select indices managed to edge higher, reflecting a measured optimism in regional markets.

MSCI’s broadest index of Asia-Pacific shares, excluding Japan, recorded a slight increase of 0.3%, indicating restrained buying interest among investors. Japan’s Nikkei index, however, outperformed, rising by 1.0%, driven by gains in key sectors. Chinese blue-chip stocks also saw positive momentum, climbing 0.8%, supported by encouraging economic data. The Caixin/S&P Global Manufacturing Purchasing Managers’ Index (PMI) for China improved to 50.8 in February from 50.1 in the previous month, signaling a modest expansion in factory activity and boosting investor sentiment.

In the U.S., stock futures showed little movement in early trading. Both S&P 500 futures and Nasdaq futures remained flat after a volatile trading week that saw heavy losses, though Friday’s late-session rally helped ease some pressure. Meanwhile, European stock market futures indicated a slightly positive start, with EUROSTOXX 50 futures gaining 0.3%, while FTSE futures and Germany’s DAX futures both rose by 0.6%.

As global markets navigate ongoing economic uncertainties, investors are keeping a close watch on trade policy developments and economic indicators that could influence market trends in the coming sessions.

FII/DII Activity

On Friday, Foreign Institutional Investors (FIIs) continued their selling streak in the Indian equity market, offloading stocks worth ₹11,639 crore. Meanwhile, Domestic Institutional Investors (DIIs) remained net buyers, purchasing equities worth ₹12,308.6 crore. The contrasting trend between FIIs and DIIs highlights the ongoing shift in market participation, with domestic investors playing a key role in absorbing foreign outflows.

Crude Oil Movement

Oil prices edged higher on Monday, rising by around 1%, as positive manufacturing data from China—the world’s largest crude oil importer—fueled optimism regarding future fuel demand. The latest data indicated a recovery in China’s industrial activity, raising expectations of stronger energy consumption.

Brent crude, the global oil benchmark, climbed by 76 cents (1%) to trade at $73.57 per barrel as of 0206 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude was priced at $70.51 per barrel, reflecting a gain of 75 cents (1.1%). Despite the positive sentiment from China’s data, concerns over potential U.S. tariffs and broader global economic uncertainties continued to keep oil markets on edge.

Rupee vs Dollar

The Indian rupee showed resilience in early trade on Monday, appreciating by 9 paise to reach 87.28 against the U.S. dollar. The gains in the rupee were supported by a slight pullback in the U.S. dollar index, which tracks the greenback’s performance against a basket of six major world currencies. The index declined by 0.35% to 107.23, indicating a softening of the dollar’s strength in global markets.

Additionally, a positive sentiment in the domestic equity markets, backed by encouraging macroeconomic data, contributed to the rupee’s appreciation. Market participants will continue to monitor global currency trends and economic developments for further cues on the rupee’s movement.