Indian Stock Market Rallies for Six Consecutive Sessions: 5 Key Reasons Behind the Surge

Nifty 50 and Sensex soar over 5% in six trading sessions as investor sentiment turns bullish. Experts cite RBI rate cut buzz, strong Q4 expectations, and attractive valuations as key drivers.

March 24, 2025: Indian Stock Market Rallies for Sixth Straight Session: Here’s What’s Fueling the Surge

India’s stock market is witnessing a robust rally, with benchmark indices Nifty 50 and Sensex clocking gains for the sixth consecutive session as of Monday. In early trade, Nifty touched an intraday high of 23,650, and the Sensex climbed to 77,897, reflecting an overall surge of more than 5.5% in just six sessions.

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The Bank Nifty index also joined the party, recording an impressive 7.7% gain over the same period. Meanwhile, broader markets have outperformed, with the BSE Small-cap index up by 9.6% and the Mid-cap index by 8.3%.

So, what’s driving this market euphoria?

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Top 5 Reasons Behind the Stock Market Rally

1. Buzz Around RBI Rate Cut

Following last week’s U.S. Fed meeting, there’s strong anticipation of an interest rate cut by the Reserve Bank of India (RBI) in its upcoming April policy review. Analysts suggest this could inject fresh liquidity into the market.

As per a recent Morgan Stanley report, the RBI could implement a 75 basis points rate cut in FY26, revising their earlier 50 bps projection, thanks to declining CPI inflation.

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2. Better-Than-Expected Q4 FY25 Outlook

Experts see early signs of an economic rebound, with GDP growth rising to 6.2% in the October–December 2024 quarter, up from 5.4% in the prior quarter. As a result, the upcoming Q4 earnings are projected to be stronger sequentially, boosting investor confidence.

3. Attractive Valuations and Return of FIIs

Domestic Institutional Investors (DIIs) have continued their buying spree, with purchases worth over ₹30,000 crore in March 2025. Interestingly, Foreign Institutional Investors (FIIs) have also resumed buying, reversing their earlier selling trend, lured by attractive stock valuations and stability in the Indian rupee.

4. Strong Global and Domestic Economic Outlook

According to Morgan Stanley, India is on track to become the third-largest economy by 2028. The GDP is projected to grow from $3.5 trillion to $4.7 trillion by 2026, outpacing Germany. A stable inflation outlook (average CPI at 4% in FY26) has further bolstered investor optimism.

5. Strengthening Indian Rupee Attracting Foreign Inflows

The Indian Rupee’s relative stability has improved the appeal of Indian assets for global investors. Following the RBI’s previous 25 bps rate cut and other supportive macro measures, currency stability is encouraging more FII activity on Dalal Street.

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Outlook Ahead

Despite the bullish sentiment, analysts suggest caution. Arun Kejriwal, Founder of Kejriwal Research and Investment Services, said,

“Markets may see profit-booking soon. Global developments, especially Donald Trump’s tariff announcements on April 2, could impact sentiments when Indian markets reopen on April 3.”

Overall, with positive economic signals, supportive policy expectations, and investor optimism, Indian equities look poised for a potentially strong finish to FY25—provided global risks remain in check.

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