Good News from the U.S. Sends Indian Stock Market Soaring: Sensex Jumps Over 500 Points, Nifty Crosses 25,950

After four consecutive days of decline, the Indian stock market witnessed a strong rally on Friday. The BSE Sensex surged over 500 points in early trade, while the Nifty50 index crossed the 25,950 mark.

At 10:00 AM, the Sensex was trading at 84,980.50 points, up 498.69 points or 0.59%, and the Nifty50 was at 25,957.05 points, up 141.50 points or 0.55%. This marks the first significant upswing in the market this week.

Sectoral Performance and Movers:
Shares of Tata Motors PV, Reliance Industries, BEL, Infosys, Bajaj Finance, and TCS led the gains, rising up to 1.78%. On the other hand, Tech Mahindra and HCL Tech saw a minor decline in early trade.

Reasons Behind the Rally:

1. U.S. Inflation Eases:
   The U.S. reported a slight moderation in inflation, raising hopes that the Federal Reserve may ease its monetary policy next year, possibly cutting interest rates. The November inflation figures came in lower than expected, though October data could not be compiled due to a 43-day government shutdown.
2. Global Market Momentum:
   Indian markets followed gains in Asia and the U.S., where Wall Street closed higher on Thursday. Strong quarterly results from chipmaker Micron and robust AI demand also supported investor sentiment globally.
3. Foreign and Domestic Institutional Investors:
   Foreign institutional investors (FIIs) remained net buyers for the second consecutive day, purchasing shares worth approximately ₹596 crore on 18 December. Domestic institutional investors (DIIs) bought nearly ₹2,700 crore worth of shares. Analysts note that the halt in FII selling is positive for the market but may not indicate a long-term directional change.
4. Rupee Strengthens:
   The Indian rupee appreciated by 24 paise to 89.96 per USD in early trade, supported by corporate dollar inflows and easing crude oil prices. Earlier this week, the rupee had breached the 91 per USD mark, hitting a record low, but recovered following RBI intervention.

The combination of global cues, easing U.S. inflation, and strong institutional buying has injected optimism into Indian markets, giving investors reason to cheer.