Market Rally Ignited by Geopolitical Calm

Investors on Dalal Street have reason to celebrate as the Sensex surged by 3,000 points this week, marking a significant rebound. The rally was sparked by the announcement of a ceasefire between India and Pakistan, contributing to a $300 billion increase in investor wealth. India's market capitalization now stands at an impressive $5.2 trillion.

Global and Domestic Factors Fuel the Rally

The week saw global equities joining the relief rally, buoyed by the reduction of US tariffs following trade deals with the UK and a truce with China. Shrikant Chouhan of Kotak Securities noted, "Indian markets were among the top global performers, benefiting from reduced geopolitical risks." Domestically, expectations of RBI rate cuts and a normal monsoon forecast added to the positive sentiment.

Sector-Specific Gains Highlight Investor Confidence

Smallcap and midcap stocks outperformed, with the BSE’s smallcap index gaining 9.2%. The defence sector, in particular, saw significant gains after PM Modi emphasized domestic arms manufacturing. Railway stocks also experienced strong buying interest, showcasing the broad-based nature of the rally.