Why stock market rose today: Sensex soars 1,090 pts; Nifty above 22,500; 5 key factors behind surge

Benchmark Nifty 50 ended over 1.5% higher on Tuesday, rebounding from the previous session’s sharp selloff, as bargain hunting and a broader recovery across Asia lifted sentiment amid hopes of U.S. tariff negotiations. The rally also comes ahead of the Reserve Bank of India’s policy decision on April 9, with expectations of a 25 basis point rate cut.

The Nifty surged 375 points, or 1.69%, to close at 22,535, while the Sensex rose 1,089 points, or 1.49%, to end at 74,227. During the session, the Sensex had climbed over 1,700 points.

The total market capitalisation of BSE-listed firms jumped by Rs 7.46 lakh crore to Rs 396.71 lakh crore.

Among sectors, the Nifty PSU Bank index gained 2.6%, while Finance, Realty, Oil & Gas, and Consumer Durables rose over 2%. Nifty Auto, IT, Metal, and Pharma added 1–2%. In the broader market, the Nifty Midcap 100 and Smallcap 100 climbed more than 2% each.

Meanwhile, India VIX, the volatility index, dropped 10.3% to 20.44.

Key factors behind the surge:

1) Rebound in global markets

Indian equities rallied alongside a rebound across Asia as investors pinned hopes on a possible softening of the U.S.’s aggressive tariff stance.

Japan’s Nikkei led the gains with a 6% jump after Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer were tasked with negotiating with Tokyo.

While U.S. President Donald Trump reiterated plans to impose additional 50% tariffs if China did not back down, Beijing rejected the “blackmail nature” of the threats. Despite tensions, Hong Kong’s Hang Seng rose 1.5%, and China’s Shanghai Composite index gained 1.6%, offering relief to global markets.

In Europe, shares rose from 14-month lows and markets in London, Paris and Frankfurt were up more than 1% each.

2) RBI policy decision

Markets are also reacting ahead of the RBI’s monetary policy decision due April 9. The central bank is expected to cut the repo rate by 25 basis points, with analysts forecasting a more accommodative stance as global trade tensions weigh on growth.

3) Buying the dip

Rally in the equity markets also comes as investors capitalize on recent declines, with the Nifty index down over 14.8% from its peak. The mid-cap and small-cap indices have also corrected by around 19.2% and 23.6%, respectively.

4) Drop in crude oil prices

Crude oil prices fell below the $65 mark on Monday, its lowest since August 2021, led by concerns that U.S. tariffs might depress demand and lead to a global recession.

Meanwhile, Brent crude was trading at $64.34 per barrel on Tuesday, while U.S. West Texas Intermediate (WTI) was at $60.88 around 3:59 pm IST.

5) Falling U.S. bond yields and weaker Dollar boost sentiment

The U.S. 10-year Treasury yield fell to 4.15% from around 4.5% in mid-February, while the 2-year yield declined to 3.73% from 4.28%. Meanwhile, the U.S. Dollar Index stood at around 103, supporting positive sentiment in emerging markets like India.

A weaker dollar and lower U.S. bond yields make Indian equities more attractive to foreign investors, potentially driving higher inflows into the market.