SENSEX soars over 1,100 points, NIFTY50 tops 22,800: Five reasons why markets surged today

Strong Asian markets

Indian equities took cues from the positive trend in Asian markets after macroeconomic data from China showed that its retail sales rose in January and February, highlighting the benefits of stimulus measures that were announced by the Chinese government starting in September last year.

Japan's Nikkei rose 1.56%, China's Shanghai Composite gained 0.10%, Hong Kong's Hang Seng climbed nearly 2%, and Australia's S&P/ASX 200 index gained 0.1%.

Easing geopolitical tensions

Easing geopolitical tensions also added to the positive sentiment for equities after media reports suggested US President Donald Trump is likely to speak to Russian counterpart Vladimir Putin on Tuesday to end the war in Ukraine. The White House said, "We've never been closer to peace than at this moment," ahead of Donald Trump and Vladimir Putin holding talks on Ukraine on Tuesday.

Trump said he and Putin will discuss "land," "power plants," and "dividing up certain assets," while the Kremlin confirms a call between the US and Russian leaders is being planned, BBC reported.

US stocks end higher

US stocks ended higher for the second straight session. The S&P 500 rose 0.6%, the Dow Jones Industrial Average climbed 0.9%, and the Nasdaq Composite rose 0.3%.

All eyes will be on the US Fed chair Jerome Powell as the decision by the Federal Reserve on interest rates comes later in the week amid continuing worries about President Donald Trump’s trade war.

Broader markets outperform

Buying was visible across sectors as all the major sector gauges compiled by the National Stock Exchange ended higher, led by the NIFTY Realty index's 3.2% gain. NIFTY Consumer Durables, Private Bank, Metal, IT, Financial Services, Auto, and Bank indices also rose between 1.6-2.6% each.

Broader markets outperformedg their larger peers as the NIFTY Midcap 100 index rose 2.18% and the NIFTY Smallcap 100 index advanced 2.71%. The NIFTY500, NIFTY200, and NIFTY100 indices also rose betweenr 1.65-1.82% each.

Heavyweights rally

The rally in Tuesday's session was powered by buying interest in index heavyweights like ICICI Bank, HDFC Bank, Larsen & Toubro, Mahindra & Mahindra, Infosys and Kotak Mahindra Bank. These shares alone contributed over 600 points towards the gain in the 30-share SENSEX.

Despite up move in the markets, NIFTY50 index is still down nearly 13.41% from its 52-week high and concerns remain as foreign institutional investors continue to remain sellers of Indian equities. Foreign institutional investors sold shares worth ₹4,488 crore while domestic institutional investors bought shares worth ₹6,000 crore, data from the NSE showed.