Why BSE Sensex, Nifty50 Are Soaring: Reasons Behind Monday’s Market Rally

Indian equity benchmarks, the Sensex and Nifty, climbed sharply on Monday as softer-than-expected U.S. inflation data bolstered expectations for additional Federal Reserve rate cuts in 2025 and signs of progress in U.S.-China trade talks lifted investor mood.

The S&P BSE Sensex advanced over 700 points to an intraday high of 84,932.08, while the NSE Nifty 50 rose more than 200 points to touch 26,005.95. The Nifty index is now just 1% away from its all-time high of 26,277.35, while the Sensex sits 1.2% below its record peak of 85,978.25.

Monday’s rise followed a brief pause in the previous session, ending a six-day winning streak for the benchmarks.

U.S. Inflation Data Boosts Rate-Cut Hopes
The market rally was primarily driven by lower-than-expected inflation figures in the U.S., which strengthened the case for further monetary easing by the Federal Reserve.
Sugandha Sachdeva, Founder of SS WealthStreet, said, “Indian markets are seen building on the gains of the last four consecutive weeks wherein the positive global cues have buoyed the sentiments of the domestic market as well. It is majorly led by the gains in technology shares in the previous session on Wall Street which is buoying the index as well.”

She added, “Apart from that, the inflation figures for the September month have been below expectations wherein US CPI inflation rose by 3% year-on-year which was less than expectations of 3.1%. So, this has reinforced bets of a 25 basis point rate cut by the U.S. Fed at this week’s meeting which is lined up for 28 - 29th of October.”

Easing U.S.-China Trade Tensions Add Optimism
Besides the inflation data, markets were also supported by signs of easing trade tensions between the U.S. and China.

Sachdeva noted, “The easing trade tensions between U.S. and China are also leading to positive sentiments in the markets. The U.S. administration had threatened to impose 100% tariffs on certain Chinese goods as a retaliation to Beijing's introduction of export curbs on rare earth materials. However, last week the Trump administration had confirmed that President Trump will meet the Chinese President in South Korea during this week's APEC summit.”

She said that this development, “is also leading to a lot of risk on sentiments in the market. Besides that, the officials from both the countries have been able to work on a trade framework before the meeting between the leaders of the two largest economies. So, that is also providing a boost to the domestic markets in the market and leading to a lot of optimism especially as the metal index has been soaring higher as well as the IT index.”

Earnings Optimism and Technical Outlook
Market optimism was also supported by ongoing earnings expectations and firm technical indicators.
Sachdeva explained, “Earnings-related optimism is also seen in the market but yes in terms of the key levels we have key support in place at the 24,700 area. As long as this holds, the outlook remains positive and once the index is able to surpass 26,150 odd levels we are likely to see the benchmark index scaling new highs as well in coming days.”

She added,“All eyes would now be on the trade talks between U.S. and China as well as the Fed's meeting which is lined up for this week. Apart from that, the guidance for the coming months would also be something that would be on the investors’ radar. So, that will also provide further cues for the benchmark index.”

Vishnu Kant Upadhyay, AVP -Research & Advisory, Master Capital Services said, “India's benchmark Nifty 50 index briefly surged past the psychologically significant 26,000 threshold today, marking its second such breach this year. The index closed at 25,970, up 0.66% or 172 points, while the BSE Sensex advanced 495 points (0.60%) to settle at 84,745. This uptick extended a multi-session winning streak, fueled by a confluence of domestic resilience and favorable global signals. At the heart of today's action was a widespread sectoral lift-off, with realty, metals, and oil & gas leading the charge. Broader market sentiments also remained buoyant. Reports of advancing U.S.-India negotiations toward a tariff-reduction pact have ignited hopes for smoother export pathways. This comes alongside positive U.S.-China dialogue. Amid better that expected Q2 earnings, growing optimism about India-US trade deal, and value buying in large-cap stocks, the Nifty50 is likely to trade firm with potential upsurge towards 26300-26500. Market is now ‘Buy the Dip’ mode, every corrective fall towards 25700 should be viewed as opportunity to build fresh long positions.”

With positive global cues, easing inflation, and progress in U.S.-China negotiations, investors expect the current momentum to continue. The upcoming Federal Reserve meeting and developments from the APEC summit will be closely watched for signals on the next phase of the market trend. 

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