SENSEX, NIFTY50 clock 2% weekly gains, equity investors richer by ₹12.37 lakh crore; key factors behind the surge

The Indian equity benchmarks posted strong weekly gains for the week ending June 27. The 30-share SENSEX rose 2% or 1,651 points to settle at 84,058.90, and the NIFTY50 index climbed 2.09% or 525 points to close at 25,638.

Both the benchmarks surged to their highest level in over nine months, data from stock exchanges showed. The sharp rise in benchmarks came after geopolitical tensions eased in the Middle East, triggering a rally in global markets.

Easing tensions in the Middle East

Bullish sentiment on Dalal Street was unleashed after a ceasefire announcement by US President Donald Trump ignited a wave of buying interest for equities across the globe and triggered a fall in crude oil prices. Market participants cheered a fall in oil prices and a weaker dollar amid strong foreign flows.

The fall in the dollar index, which tracks the greenback against a basket of six currencies, including the pound and yen, fell to near a 52-week low of 96.82 on Friday.

Analysts say that a weaker dollar makes emerging market equities appealing to foreign investors; as a result, foreign institutional investors (FIIs) bought shares worth ₹12,692.56 crore in Thursday's session alone. So far in the first quarter of the current financial year, FIIs have bought shares worth 22,336 crore, according to NSDL data.

Expectations of a trade deal with the US after President Trump hinted that a major trade agreement with India could be in the works also added to the bullish sentiment among equity investors.

Heavyweights rally

The rally in the benchmarks was aided by buying interest in index heavyweights like Reliance Industries, which reclaimed a market capitalisation of ₹20 lakh crore, and HDFC Bank, which surged to a fresh record high during the week.

ICICI Bank, State Bank of India, Larsen & Toubro and Mahindra & Mahindra also contributed to the rally in the SENSEX and NIFTY50 indices.

During the week, equity investors' wealth zoomed by ₹12.37 lakh crore as market capitalisation of BSE listed firms jumped to ₹46,113,059.36 crore ($5.56 trillion), according to BSE data.

Sectoral landscape

Buying was visible across the board as 15 major sector gauges compiled by the National Stock Exchange ended higher, led by the NIFTY Metal index, which jumped nearly 5%.

Metal stocks came under buying interest after White House Press Secretary Karoline Leavitt said that the July deadline for Trump's tariffs can be extended.

Metal stocks also got a boost from a lower dollar index, as it helps boost demand for commodities like metals.

The NIFTY Oil & Gas index advanced 3.25% after crude oil prices fell as tensions in the Middle East eased.

NIFTY Consumer Durables, Financial Services, PSU Bank, Bank and Private Bank indices also rose between 1.8% and 3.4%.

Broader markets outperformed their larger peers as the NIFTY Midcap 100 index rose 2.4% and the NIFTY Smallcap 100 index zoomed 4.30%.