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The Indian markets witnessed significant gains backed by a sharp rally in global markets as the Sensex closed 566 points higher at 84,778.84 and the Nifty ended at 25,966 or 170 points higher.

The top gainers included stocks like Bharti AIrtel, State Bank of India, Reliance Industries, Eternal and Tata Motors Public Vehicles while the laggards had stocks such as Hindustan Unilever, Sun Pharmaceuticals, Mahindra & Mahindra, Adani Ports and Bajaj Finance.

Earlier today, Sensex rang the opening bell near 84,330, rising more than 100 points, while the NSE Nifty50 climbed 43 points to start trading at 25,838.35, around 9:15 AM.

What's Fuelling The Rally?

The benchmark indices opened higher on Monday, tracking a global rally after US inflation data came in softer than expected, bolstering hopes of imminent Federal Reserve rate cuts. Optimism was further lifted by renewed prospects of a US–China trade agreement and fresh foreign fund inflows.

According to exchange data, Foreign Institutional Investors (FIIs) purchased equities worth Rs 621.51 crore on Friday, providing additional support to domestic markets.

What Do Analysts Say?

Global equities ended the previous week on a firm note, with US indices leading the charge. “US markets ended in positive territory on Friday. The global market construct is bullish. With Dow Jones, Nikkei and Kospi at record highs, the sentiments are positive. Globally, there are signals of declining trade tensions,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Analysts highlighted remarks from US Treasury Secretary Scot Bessent, who said there was a “substantial framework for trade negotiations with China”, signalling that a potential US-China deal could be on the horizon.

Domestic Fundamentals Show Positive Turn

Analysts noted that India’s underlying fundamentals are improving, supported by robust festival-season demand and signs of renewed private capital expenditure. “This long awaited trend has significant positive implications for India’s growth and stock market,” they said.

Prashanth Tapse, Senior Vice-President (Research) at Mehta Equities Ltd, added that optimism was also being fuelled by “prospects of a US–China trade deal and possible US tariff cuts on Indian imports to 15–16 per cent.”