Indian stock markets witnessed strong gains for the fifth straight session on Friday, driven by fresh buying interest and global cues. If you’re wondering why stock market rose today, key reasons include the return of foreign investors, optimism over US Fed rate cuts, falling US bond yields, and strong technical breakout signals that pushed the Sensex over 550 points higher and Nifty past the 23,350 mark.
Why Stock Market Rose Today: 4 Key Drivers of the Rally
1) FII Buying Sparks Market Momentum
A major reason why stock market rose today is the return of Foreign Institutional Investors (FIIs) to Indian equities. After months of consistent selling, FIIs turned net buyers in two of the last four sessions. On March 20 alone, they bought equities worth Rs 3,239 crore. According to Vinod Nair, Head of Research at Geojit Financial Services, “The soft stance from the US Fed has revived foreign interest in Indian markets, leading to positive momentum.”
2) US Fed Projects Two Rate Cuts in 2025
Another big factor why stock market rose today is the US Federal Reserve’s indication of two potential rate cuts by the end of 2025. Although the Fed raised inflation forecasts, the decision to keep rates steady while signaling cuts lifted global market sentiment. Lower US interest rates typically weaken the dollar and make emerging markets like India more attractive for investors.
3) Decline in US Bond Yields & Weak Dollar Support Market Sentiment
One more reason why stock market rose today is the fall in US bond yields and weakening of the dollar index. The US 10-year Treasury yield dipped to 4.227%, while the 2-year yield dropped to 3.95%. The US Dollar Index also slipped below 104, which fueled positive sentiment towards Indian equities. A weaker dollar and lower bond yields often attract higher foreign inflows into emerging markets.
4) Technical Breakout Adds to the Rally
Technical indicators also explain why stock market rose today. As per Rupak De, Senior Technical Analyst at LKP Securities, “The Nifty continued its upward momentum after a falling trendline breakout. If it breaches the 23,400 mark decisively, the next target could be 23,600.” This technical strength further supported today’s rally.
Closing Summary:
The BSE Sensex surged 557 points to settle at 76,905, while the Nifty50 climbed 160 points to close above 23,350. Market capitalization of BSE-listed companies jumped by Rs 4.91 lakh crore, reaching Rs 413.52 lakh crore. Apart from Metal and Consumer Durables, all sectors traded higher, with IT stocks recovering losses.