On Tuesday, March 18, 2025, India's benchmark stock indices, the Sensex and Nifty50, experienced notable gains, with the Sensex surging by 924.35 points to open at 75,094.30 and the Nifty50 climbing over 270 points to reach 22,781.40. These positive developments come on the heels of strong domestic institutional investor (DII) support, which offsets the significant cash sales recorded by foreign portfolio investors (FPI) on Monday.
The overall market sentiment appears optimistic, buoyed by the release of stronger-than-expected retail sales data from the United States. Following suit, Asian markets rallied with major indices exhibiting positive trends on Tuesday morning. The current economic indicators point toward greater macro stability, contributing to the favorable atmosphere for buyers.
Several key factors are driving the recent market rally:
- Valuation Comfort After Downturn: The Indian equity market is absorbing buying interest primarily due to valuation comfort, especially among large-cap stocks. The current price-to-earnings ratio (PE) of the Nifty50 stands at 20, nearing its three-month low, indicating affordability for investors following recent market downturns.
- Macro Stability: Recent macroeconomic indicators are showing green signals, signaling improved economic health, which adds fuel to the rally.
- Limited Impact from U.S. Tariffs: Despite concerns over tariffs threatened by U.S. President Donald Trump, many investors believe the anticipated impact on the Indian market will be limited.
- Strong Rupee Performance: The Indian rupee surged to its highest level against the U.S. dollar, trading at 86.71, following its rise of 10 paise earlier on Tuesday. This strengthening of the rupee, combined with the decline of the U.S. dollar index—which has dropped 4.5% year-to-date and is currently around 103.50—is expected to exert positive pressure on the Indian equity market.
- Potential RBI Rate Cuts: With inflation rates easing, investors are hopeful the Reserve Bank of India will shift focus to growth support through significant cuts to benchmark policy rates. The Monetary Policy Committee (MPC) of the RBI is set to convene between April 7 and 9, 2025, to discuss the strategy moving forward.
Meanwhile, shares of Manappuram Finance saw upward momentum of approximately 1.97%, reaching an intraday high of Rs 213.80 per share. The rise followed the company's announcement about a board meeting scheduled for March 20, 2025, where they will evaluate various options for raising funds, potentially through equity shares or convertible securities. Manappuram Finance, established as a non-banking financial company (NBFC) focusing on providing financial services, particularly to lower socio-economic segments, reported third-quarter profits halved due to pressures from its microfinance sector, where it faced lending restrictions for the quarter.
At approximately 1:50 PM on the same day, Manappuram shares were trading at Rs 212.60, reflecting growth amid positive shifts within the broader equity market. Simultaneously, the BSE Sensex was recorded at 75,086.08, showcasing its upward trend throughout the trading day.
Tata Motors also made headlines, concluding trade on Monday at Rs 660.9, with its shares hitting intraday highs of Rs 666.15 and lows of Rs 657.5. The company enjoys sizable market capitalization, valued at Rs 243,289.8 crore, and boasts impressive historical trading patterns with 52-week highs at Rs 1,179.05. Important trading levels for Tata Motors indicate resistance at Rs 684.38 and significant supports at Rs 668.03 and Rs 657.92, inviting investor attention.
Overall, the Indian stock market's performance reflects investor confidence and macroeconomic positivity, positioning itself well amid external challenges. With the upcoming decisions from corporate boards and policy-making bodies such as the RBI, watchful investors are eager to navigate this dynamic marketplace.
