Investors’ wealth soars by `25.77 lakh cr

Key  indices Sensex and Nifty surged more than 6% in the last four trading sessions, as a temporary pause on tariffs by the US, return of FIIs, and prediction of an above-normal rainfall in the upcoming southwest monsoon season lifted market sentiment..

Moreover, retail inflation dipping to a nearly six-year low also raised hopes for a third rate cut by the RBI.

 In the last four trading days, the BSE benchmark index jumped 4,706.05 points or 6.37 per cent, and the NSE Nifty surged 1,452.5 points or 6.48 per cent. Accordingly, investors' wealth rallied by Rs 25.77 lakh crore to $4.90 trillion in the four days. 

According to Vishnu Kant Upadhyay, AVP, Research & Advisory, Master Capital Services, several factors like foreign fund inflows, temporary pause on tariffs by the US and further monetary easing by the RBI have converged to drive the recent sharp rally in the Indian markets despite global trade uncertainty.

“The domestic market experienced a strong resurgence during the holiday-shortened week. The rally gained momentum following a pause in US reciprocal tariffs, with exemptions granted to products such as smartphones and computers. Continued FII inflows and the forecast of an above-normal monsoon also contributed to the market's outperformance relative to other emerging economies. 

“Bank Nifty led the rebound sharply, supported by a favourable monetary environment and a reduction in deposit rates by major banks, which is expected to enhance margins and benefit banking stocks,” said Vinod Nair, Head of Research, Geojit Investments.

“In the week ahead, a sector- and stock-specific investment strategy is anticipated, driven by upcoming earnings releases and subsequent management commentary, which will play a key role in shaping market sentiment. At present, the domestic macroeconomic environment remains supportive, encouraging investors to increase their exposure to riskier assets for the long term. Additionally, the inflation outlook appears favorable, reinforced by forecasts of an above-normal monsoon and a decline in oil prices. 

On the flip side, the earnings growth for the fourth quarter of FY25 is likely to be insipid due to muted demand and margin pressures. Investors are advised to adopt a cautious stance, particularly with export-oriented stocks, and instead focus on pure domestic themes such as banking, consumer goods, healthcare, transportation, and infrastructure,” he said.