Sensex rebounds 1,500 pts, tops 78K: 8 reasons why stock market bulls are making comeback

Indian benchmark indices managed to stage a sharp rebound during the trading session Thursday ahead of a holiday tomorrow on the account of Good Friday. BSE Sensex surged more than 1,500 points from its day's low to top 78,000 mark, while NSE' Nifty50 index jumped about 450 points from day's low to hover near 23,750-mark.

"India’s recent outperformance is striking. We are the only large market which has erased all losses incurred after April 2. India which is a domestic consumption driven economy will be one of the least impacted by the tariff crisis. The market is discounting the possibility of a bilateral trade agreement between US and India within a few months, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

"Domestic consumption driven stocks  in financials, telecom, aviation, cement and sections of autos are hitting 52 week highs and some are setting new records. This trend will continue. FIIs have turned buyers in India since the prospects of US and China are the worst in this crisis. FIIs are likely to continue buying high quality largecaps in domestic consumption sectors," he said.

Broader markets were also trading higher as BSE midcap and smallcap indices added about half a per cent each. Fear gauge India VIX was down and slipped below 16-level. Here are the key factors that lead to 1,500 point recovery in the BSE's barometer during Thursday's session:

Positive Asian stocks
Asian equities edged higher on Thursday as traders took stock of trade negotiations between the US and Japan even as uncertainties around tariffs implemented by President Donald Trump kept sentiment fragile. Investors were also digesting comments from Federal Reserve Chair Jerome Powell. Nikkei gained more than 1.4 per cent, while US stock futures were also surging higher.

Buying in heavyweights
The major push for Sensex was provided by the heavyweight counters during the day as result lead HDFC Bank and ICICI bank cumulatively contributed about 450 points in the Sensex gains. Other heavyweights like Reliance Industries added 150 points, while Bharti Airtel contributed 125 points to the rally.

Appreciation of Indian Rupee
Indian Rupee extended its gaining streak to day four, as strong economic performance and renewed inflows in the domestic equities supported the currency.  The dollar has taken a beating this month as the US has threatened, imposed and then postponed massive tariffs, undermining confidence in US economic growth and stability.

Lower oil prices
Oil prices continue to remain below $70 per barrel mark despite a decent recovery this week. Oil prices extended gains on Thursday on the prospect of tighter supply after Washington imposed further sanctions to curb Iranian oil trade and as some OPEC producers pledged more output cuts to compensate for pumping above agreed quotas.

Eased inflation in India
India’s retail inflation eased to 3.34 per cent on an annual basis in March, marking the lowest rate since September, 2019, according to government data released on Tuesday. The change was likely driven by the continued trend of softening food prices that also led to February inflation witnessing a seven-month drop of 3.61 per cent year-on-year.

Normal Monsoon Predictions
India is likely to see above-average monsoon rains for the second straight year in 2025, the government said, raising expectations of higher farm and economic growth in Asia's third-biggest economy. Good rains will help to bring down food prices, to keep inflation at the central bank's comfort level, and to allow the world's biggest rice exporter to ship more of the staple.

Weekly Expiry
Weekly futures of the Nifty50 index will expire today, adding to more volatility in the market, leading to short covering. Traders shall be avoiding any overnight positions ahead of long-weekend and tariff concerns across the globe. Traders are advised to align their positions accordingly, focusing on the sectors that continue to outperform, said Religare Broking.

With a long weekend approaching and global uncertainty still lingering, it would be prudent to avoid aggressive overnight positions and manage risk cautiously, said Sameet Chavan, Head Research, Technical and Derivative at Angel One.

Technical Outlook
RSI is moving upward and is above its reference line, which indicates a positive bias. The trend-deciding level for the day is 23,387. If Nifty trades above this level, it may further rally up to 23,502-23,567-23,681 levels. However, if it trades below 23,387 levels, we may witness profit booking in the market, and the index may correct up to 23,323-23,208-23,144 levels, said Axis Securities.