The Nifty bulls extended their Friday rally into Monday, pushing the index past the 25,000 mark, driven by a mix of supportive global and domestic triggers. While the index ended with strong gains, climbing 148 points or 0.6%, the closing of 25,001 just on the mark.
On the global front, sentiment improved after U.S. President Donald Trump postponed the 50% tariff deadline on the European Union to July 9 from the earlier date of June 1.
Domestically, the rupee strengthened past the 85-per-dollar level for the first time in two weeks, building on Fridayโs 0.9% gain. This move was fueled by the Reserve Bank of Indiaโs (RBI) record-breaking Rs 2.69 lakh crore dividend payout to the central government for FY25โa 27% increase over last yearโs Rs 2.11 lakh crore.
With the June Monetary Policy Committee (MPC) meeting around the corner, the dividend boost is being seen as a positive catalyst for Indian equity markets.
“This, in turn, can sustain the low inflation and declining interest rate trend, which will continue to support the equity market,” said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.While Mondayโs early gains were led by banking and financial stocks, it was the auto and IT sectors that carried the rally forward. The Nifty Auto index climbed over 1%, with 13 of its 15 constituents in the green, some rising as much as 3%. The Nifty IT index also gained 1%, with all 10 stocks trading positively.Vijayakumar also pointed to the relative outperformance of midcap stocks, driven by strong Q4 earnings, calling it a โsignificant featureโ that has helped moderate the segmentโs steep valuations.
Can Nifty sustain 25,000?
Nilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking, does not see strong indicators in the near term to help Nifty hold on to the 25,000 mark. Citing the derivatives data, he said that there is a strong presence of Call writers around this level which are restricting investors from short covering. In his view, Nifty has to decisively break the 25,000 mark to move towards the next target of 25,200.
On May 15, Nifty hit a high of 25,116.25, which is also the highest level for 2025, before the index closed at 25,062.10. It has been downhill since then.
Vijayakumar also feels that the good news regarding tariffs is behind us now. Trumpโs comments on tariffs on the EU and the 25 % tariff threat to Apple if they donโt manufacture iPhones in the US suggest that bad news impacting the market can suddenly come from the US President at any time,” he said.
Nifty has rallied 1,000 points or 4.4% since the April 9 pause on reciprocal tariffs. Just a week after April 2 ‘Liberation Day’ coming into force, Trump blinked as bond prices fell sharply.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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