SENSEX surges 500 pts, NIFTY up over 0.6%: Key factors behind the market rally on Thursday

After falling for six sessions, the equity benchmark indices on Thursday rebounded during the day. The domestic stock market was trading in the green in the early trade amid buying in index heavyweights such as Kotak Mahindra Bank, ICICI Bank, M&M, Bajaj Finance, and Sun Pharma.

During intraday, the S&P BSE SENSEX was trading at 76,674.27 levels, up 503.19 points, or 0.66%, while the NSE's NIFTY50 index was trading at 23,201.30 levels, up 156.05 points, or 0.68%.

India's retail inflation, measured by the Consumer Price Index (CPI), eased to 4.31% in January 2025 from 5.22% recorded in December 2024, government data showed on Wednesday. This is the lowest year-on-year inflation rate since August 2024.

The headline inflation has been on a downward trend since peaking at 6.21% in October 2024, the highest level in over a year since September 2023. Food inflation, based on the Consumer Food Price Index (CFPI), dropped to 6.02% in January 2025 from 8.39% in December 2024, a sharp decline of 237 basis points.

President Donald Trump upended three years of US policy toward Ukraine on Wednesday, saying that he and Russian President Vladimir Putin had agreed to begin negotiations on ending the war following a dramatic prisoner swap.

Trump in a social media post said that he and Putin held a lengthy phone call during which they committed to “work together, very closely” to bring the conflict to an end and would meet in person, including perhaps in each other's countries.

It was unclear how closely Ukrainian President Volodymyr Zelenskyy would be involved. Although Trump held a phone call with him on Wednesday, Ukrainian presidential adviser Dmytro Lytvyn said, characterising it as a "good conversation."

The rupee climbed 14 paise to 86.81 against the US dollar in early trade on Thursday on the back of easing American currency and receding crude oil prices overseas.

The local unit, which was under pressure due to unending foreign fund withdrawal, found support due to some recovery in domestic equity markets triggered by the better-than-expected inflation data that was released by the government on Wednesday, forex traders said.

At the interbank foreign exchange, the rupee opened stronger at 86.82 and gained further ground to trade at 86.81 against the greenback during early deals, registering a gain of 14 paise from its previous close.

Brent crude, the global oil benchmark, dropped 1% to $74.43 per barrel in futures trade.

All the sectoral indices on the BSE were trading in the green. Realty and metal stocks were the biggest gainers.

The BSE REALTY index was trading at 6,685.74, up 114.98 points, or 1.75%, while the BSE METAL index was trading at 28,202.05, up 489.62 points, or 1.77%.