Closing Bell: Sensex surges over 780 pts, Nifty nears 23,700 - Why stock markets rallied today? Anil Singhvi explains

Indian stock markets extended gains for the second straight session on Thursday, with the Sensex and Nifty opening higher despite elevated crude oil prices and continued weakness in the rupee.

The Indian rupee remained near record low levels after crossing the 95.7 mark against the US dollar for the first time ever in the previous session.

The BSE Sensex rose 789.74 points, or 1.06 per cent, to trade at 75,398.72, while the NSE Nifty50 gained 277 points, or 1.18 per cent, to 23,689.60 in early trade.

‘Hope’ Driving Market Rally, Says Anil Singhvi

Market expert Anil Singhvi said the sharp rise in equities was mainly driven by “hope” that the government could announce big reform measures in the coming days.

Speaking during a market discussion, Singhvi said the entire mood of the market currently revolves around expectations that policymakers may take steps to strengthen the Indian rupee and reduce dollar outflow from the country.

“The biggest word today is hope,” Singhvi said. “The market believes the government may take some major decisions. That is why we are seeing such strong momentum.”

According to him, investors are expecting measures that could help improve foreign exchange flows and reduce pressure on the rupee. He said a stronger rupee and lower dollar outflow would have a double positive impact on the economy and markets.

Government Action, Foreign Flows in Focus

Singhvi said discussions in the market suggest several possible steps could be considered by the government. These include forex-related measures, restrictions or temporary changes in the Liberalised Remittance Scheme (LRS), and steps to attract more foreign investment into India.

He said there is also speculation that taxes such as Securities Transaction Tax (STT) or capital gains tax for foreign institutional investors (FIIs) could be reduced to encourage higher foreign inflows. “If such steps are taken for all investors, it would be even better,” he said.

The market expert also pointed to expectations of positive developments from international events, including talks involving the United States and China. According to him, global cues combined with domestic expectations have created a strong recovery sentiment in the market.

Key Nifty, Bank Nifty Levels to Watch

On market levels, Singhvi said key resistance zones on the Nifty index were crossed during the day, leading to stronger buying momentum.

He identified the 23,425-23,575 zone as a strong support range for the Nifty. For Bank Nifty, he said the important support zone stands at 53,250-53,550.

On the upside, Singhvi said Nifty could face profit booking between 23,800 and 23,950. He added that 23,800 is an important technical level because it was earlier a breakdown point for the market. For Bank Nifty, he said the recovery zone lies between 54,450 and 54,875.

Singhvi also highlighted the importance of closing levels. According to him, if Nifty closes above 23,600 and Bank Nifty above 54,100, it would be considered a healthy close. However, a “strong and powerful” close would happen only if Nifty settles above 23,800 and Bank Nifty above 54,550.

“If Nifty closes above 23,800 and Bank Nifty above 54,550, then traders can say the market still has strong momentum for the next session,” he said.

India VIX Signals Recovery Trend

The market analyst also spoke about the India VIX, often referred to as the market’s fear gauge. He said the VIX had earlier signalled weakness in the market, but is now indicating the possibility of recovery.

According to Singhvi, as long as VIX does not close above 20.20, the chances of further recovery in the market remain strong. “A sharp rise in VIX above 20.20 could again signal fresh weakness,” he said.

The India VIX, which measures market volatility, fell 4.18 per cent to 18.61 on Thursday, indicating easing fear and improving sentiment among investors.

Crude Oil, Rupee Still Key Risks

Despite the optimism, Singhvi warned investors not to ignore global risks completely. He said crude oil prices remain elevated and the rupee is still under pressure. He noted that Brent crude prices are still trading around the 106-dollar level, which remains a concern for the Indian economy.

“Enjoy the positive news and recovery, but do not ignore crude oil and the rupee,” Singhvi cautioned. “The real comfort will come only when crude prices cool down, and the rupee strengthens.”

He said short-term market swings of 50 to 100 points in Nifty are normal during such volatile phases, but investors should keep an eye on broader economic indicators rather than getting carried away by short-term excitement.