Sensex & Nifty Soar Over 1% After Economic Survey 2025

The Indian stock market witnessed a strong rally on Friday, just a day before the Union Budget 2025, with both the

Sensex and Nifty 50 surging over 1%. Investor optimism, positive global cues, and expectations of pro-growth policies played a key role in driving the market higher.

The S&P BSE Sensex jumped nearly 800 points during the session. This marked the fourth consecutive day of gains for the benchmark indices. By the close of trading, the Sensex settled 740.76 points (0.97%) higher at 77,500.57, while the Nifty ended at 23,508.40, up 258.90 points (1.11%). 

Key Reasons Behind the Market Rally

1. Investor Optimism on Growth Measures

Investors are anticipating growth-focused policies in the upcoming budget, which could include increased infrastructure spending, incentives for key industries, and job creation measures. This optimism has fueled buying interest across sectors.

2. Budget Hopes and Government Policies

The market is experiencing a pre-Budget rally driven by expectations of pro-growth measures. Prime Minister Narendra Modi’s recent speech, emphasizing "inclusion, investment, and innovation," has further strengthened hopes for economic relief, tax benefits, and women-centric initiatives. Investors are looking forward to a fiscal roadmap that supports sustained economic expansion.

3. Strong Performance in IT, Auto, and Consumer Stocks

Sectors such as information technology (IT), automobiles, and consumer durables led the rally, with many stocks in these segments posting significant gains. The anticipation of strong quarterly earnings and favorable government policies has driven investor interest in these sectors.

4. Hopes of Tax Relief for Individuals and Businesses

Market sentiment was further boosted by speculation around potential tax cuts for individuals and businesses. Lower taxation could improve consumer spending and drive investments, leading to a stronger economic recovery.

5. Slower Foreign Investor Selling

Foreign portfolio investors (FPIs) have been selling Indian equities in recent weeks. However, the pace of selling has slowed down considerably, providing some relief to the market. A potential reversal in FPI trends could further strengthen market sentiment in the coming weeks.

7. Positive Global Cues

Supportive global market trends have also contributed to the rally. Asian markets remained strong, while Wall Street posted gains overnight. Japan’s Nikkei surged, driven by a tech stock rally, following strong earnings from Tesla, IBM, and Meta Platforms. This positive global sentiment added to the bullishness in the Indian markets.

8. RBI Rate Cut Hopes

Investors are optimistic about a shift in the Reserve Bank of India’s (RBI) monetary policy stance. While the US Federal Reserve kept interest rates unchanged in its recent meeting, expectations of an upcoming rate cut by the RBI have strengthened. The RBI’s recent liquidity measures, infusing approximately ₹1.5 trillion into the system, indicate a possible easing in the near future.

9. Large-Cap Heavyweights Drive Market Gains

Strong buying in large-cap stocks provided additional support to the rally. Companies like Tata Consumer Products, Nestle India, Bharat Electronics, Trent, and Hero MotoCorp were among the top gainers on the Nifty 50 index. Nearly 47 out of 50 stocks in the index closed in the green, reflecting broad-based buying interest.

Conclusion

The Indian stock market’s rally ahead of the Union Budget 2025 reflects strong investor optimism, fueled by expectations of growth-oriented policies, global market strength, and sectoral outperformance. While uncertainties remain, the current momentum suggests that investors are betting on a favorable economic outlook in the months ahead. Market participants will now keenly watch the upcoming Budget announcements.