Stock Market Today: Sensex Surges 500 Points, Nifty50 Nears 24,800

Sensex jumps 500+ pts, Nifty near 24,800 as inflation hits a 6-year low and rate cut hopes rise

The Indian stock market began Wednesday’s trading session on firm footing, reversing the prior day’s volatility with a sharp surge in benchmark indices. Both the BSE Sensex and NSE Nifty50 posted significant early gains, lifted by a combination of favorable macroeconomic indicators, notably the sharp fall in retail inflation, and rising optimism over potential monetary policy easing by the Reserve Bank of India (RBI). 

As of the latest available data, the BSE Sensex rose by 513.28 points to reach 81,661.50, while the NSE Nifty50 climbed 183.40 points, trading around 24,761.75. The rebound followed a turbulent session on Tuesday, which saw Nifty plunge over 400 points from its intraday high, ultimately ending near the day’s low due to aggressive profit-taking after Monday’s sharp rally triggered by ceasefire developments in the Middle East. 

Cooling Inflation at 6-Year Low Fuels Rally 

A major driver of Wednesday’s rally is the significant decline in India’s retail inflation. According to the Ministry of Statistics, the Consumer Price Index (CPI) eased to 3.16% in April, marking the lowest level since July 2019. This sharp cooling has strengthened expectations of a possible interest rate cut by the RBI in the upcoming monetary policy review. 

The easing of inflation is perceived as a green signal for policymakers to initiate accommodative measures aimed at stimulating growth, especially when global inflation trends are also moderating. The fall in fuel and food prices, along with a favorable base effect, contributed to the easing price pressures. 

This development has energized rate-sensitive sectors such as real estate, banking, and automobiles, as investors anticipate cheaper borrowing costs and a boost to demand. 

Global Factors: Mixed Sentiment on FIIs and Bond Yields 

While domestic optimism is strong, there is some degree of caution stemming from global developments. Foreign institutional investors (FIIs) have shown mixed behavior, with recent data reflecting reduced net inflows. One such concern is the rise in US 10-year bond yields, which climbed to 4.47%, raising the opportunity cost of investing in emerging markets like India. 

Additionally, a potential rotation of capital into Chinese equities has been observed, driven by signs of a possible improvement in US-China trade relations and the relative undervaluation of Chinese stocks. However, India’s domestic fundamentals remain resilient, and strong local institutional participation is helping counterbalance the pullback by foreign players. 

Sectoral and Stock Movers 

Early trade saw several sectoral indices in the green, with metal, IT, telecom, and PSU banks leading the charge. Stocks like Tata Steel, Bharti Airtel, Eternal (Zomato), Tech Mahindra, and Infosys were among the major gainers on the Sensex. These sectors are seen as key beneficiaries of falling inflation and the potential for improved global growth conditions. 

Tata Steel rose on expectations of strong demand recovery and improved realizations in the second half of the year. Tech Mahindra and Infosys gained on renewed optimism surrounding US enterprise spending and positive commentary from recent tech earnings in the United States. 

Bharti Airtel advanced following media reports of steady subscriber additions and improved average revenue per user (ARPU), while Eternal (Zomato) witnessed gains on the back of robust Q4 results and increased investor interest in the quick commerce segment. 

On the flip side, Tata Motors, Asian Paints, Nestle India, IndusInd Bank, and HUL were among the top losers. These stocks experienced profit booking after recent rallies or showed weakness following quarterly earnings. For instance, Asian Paints slipped due to margin pressure and subdued volume growth, while Tata Motors declined despite reporting strong sales, possibly indicating high valuation concerns or sectoral rotation. 

Broader Market and Volatility Index 

The broader market has also participated in the rally, with both Nifty Midcap 100 and Nifty Smallcap 100 indices trading higher. This suggests widespread participation and a healthy undertone, as investors look beyond the large-cap space to explore opportunities in mid- and small-cap counters with strong fundamentals. 

Meanwhile, the India VIX, a measure of market volatility, dropped significantly, indicating improved investor confidence and reduced fear levels in the near term. The drop in volatility also points to expectations of market stability and a reduced likelihood of sudden shocks. 

Economic Outlook and Monetary Policy Expectations 

With inflation cooling and core indicators pointing to improving demand, expectations have intensified for the RBI to adopt a more accommodative monetary stance. While the central bank has so far maintained a neutral outlook, analysts now believe a 25–50 basis point rate cut could be possible in the next policy cycle if inflation remains under control. 

The cooling of commodity prices globally, including crude oil, and the strengthening of the Indian rupee have added further comfort to the macroeconomic landscape. In addition, a strong earnings season for Indian corporates has lent support to investor sentiment, even in the face of global uncertainties. 

Outlook for the Rest of the Week 

Market participants will continue to track inflation and growth data closely. Domestically, attention is now turning to the Index of Industrial Production (IIP) data and upcoming GST collections for May. Globally, key macroeconomic indicators from the US and China, including retail sales and industrial output, will influence foreign flows and sentiment. 

If the current trend of softening inflation and strong corporate earnings continues, further upside may be on the cards for benchmark indices. However, traders remain cautious of global headwinds such as rising bond yields and geopolitical tensions, which could trigger short-term corrections. 

With sectors like IT, metals, telecom, and consumption showing strength and broader participation across the board, the stock market outlook remains favorable for the near term. As global headwinds persist, cautious optimism may define trading sentiment for the remainder of the week.