Sensex Surges 950 Points: Analysing the Key Drivers Behind Market Gains

A mix of global cues, RBI policy expectations, and technical indicators drive significant gains in Indian stock markets.

February 4, 2025: On February 4, the Indian stock market witnessed a sharp rally, with the Sensex soaring over 950 points and the Nifty 50 crossing the 23,600 mark during intraday trade. The gains were broad-based, with the BSE Midcap and Smallcap indices also advancing over 1% each. The overall market capitalization of BSE-listed firms jumped by ₹4.5 lakh crore in a single session, highlighting a day of wealth creation for investors.

Also Read: Sensex and Nifty 50 Prediction: These Are Key Support and Resistance Levels Amid Volatility

Key Market Movements:

• Sensex: Opened at 77,687.60, surged to 78,150.
• Nifty 50: Reclaimed 23,650, up by 279 points.
• Mid and Small Caps: BSE Midcap and Smallcap indices rose by 0.90% and 0.70%, respectively.

Key Factors Behind the Rally:

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1. Positive Global Sentiment
   Asian markets, including Japan’s Nikkei and Korea’s Kospi, gained over 1%, driven by optimism following US trade policy adjustments.
2. Temporary Tariff Pause by the US
   President Donald Trump’s decision to pause tariffs on Mexico and Canada boosted global investor confidence. This move signals a potential de-escalation of trade tensions, alleviating fears of an economic slowdown.
3. RBI’s Expected Rate Cut
   The Reserve Bank of India’s upcoming Monetary Policy Committee meeting has fueled hopes of a 25-basis point rate cut to support growth. Analysts also expect measures to ease liquidity, such as bond purchases or a reduction in CRR.
4. Valuation Comfort in Large-Cap Stocks
   With the Nifty 50 declining 11% from its peak, valuations have become more attractive, prompting fresh buying in large-cap stocks.
5. Technical Indicators Support Rally
   The Nifty 50 found strong support at 23,200, sustaining the bullish momentum. Resistance levels are pegged at 23,800, with analysts predicting short-term volatility due to the weekly expiry.

Market Outlook:

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Experts believe that the rally could sustain in the near term if global cues remain positive and the RBI delivers on policy easing. However, technical indicators and valuations hint at the possibility of volatility ahead.

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