At 2:55 pm, the BSE Sensex was up by 665 points, or 0.87%, at 77,425 while the Nifty50 gained 240 points, or 1.04%, trading at 23,490.
The market capitalisation of all listed companies on BSE surged by Rs 5.47 lakh crore to Rs 423.34 lakh crore.
Why is the stock market rising today?
1) Pre-Budget optimism Markets have been rallying as investors anticipate key measures in the upcoming Union Budget, scheduled for February 1. Expectations of personal income tax cuts, increased government capital expenditure, and sectoral focus on defence, railways, and manufacturing have boosted sentiment. Investors are particularly hopeful for reforms that could drive economic growth and corporate earnings. However, analysts caution that any disappointment in policy announcements could lead to market volatility.
2) Economic Survey projects 6.3-6.8% growth for FY26
The Economic Survey for 2024-25, presented in Parliament today, projected India’s real GDP growth to be in the range of 6.3% to 6.8% in FY26. This comes after the first advance estimate of 6.4% growth for 2024-25, reinforcing confidence in the country’s economic outlook.
Inflationary pressures have been easing globally, though risks of synchronized price pressures linger due to potential geopolitical disruptions, such as tensions in the Middle East and the ongoing Russia-Ukraine conflict, the survey said. “Central banks have adopted more accommodative monetary policies. However, the pace of rate cuts varies across regions depending on the growth imperatives and the pace of disinflation, creating potential divergences in economic recovery.”
3) Tech stocks rebound after DeepSeek concerns
Earlier in the week, global tech stocks faced a sell-off due to concerns over the release of China’s DeepSeek, which claimed to have developed a cost-effective AI model. This led to significant declines in major tech stocks, including Nvidia and Microsoft. However, recent statements from tech leaders have alleviated some concerns. Meta CEO Mark Zuckerberg addressed the situation, asserting that DeepSeek’s advances won’t necessitate changes to Meta’s infrastructure spending and emphasizing that competition motivates Meta to stay ahead. This has contributed to a recovery in tech stocks, positively influencing market sentiment.
4) Rate cut expectation from RBI
Expectations of an RBI rate cut have strengthened following recent liquidity measures. Morgan Stanley anticipates a 25-basis-point rate cut in the February 7 policy meeting, citing domestic growth-inflation dynamics.
“We expect the RBI to commence the rate easing cycle with a 25bps rate cut, reflecting the current domestic growth-inflation dynamics. In addition, we expect the central bank to add durable liquidity and keep a close watch on currency to limit excessive volatility,” Morgan Stanley’s Upasana Chachra said.
5) Rally in L&T and Nestle post Q3 earnings
The shares of FMCG company Nestle India today rallied 7.6% after posting a 5% YoY jump in its Q3 PAT at Rs 688.01 crore. The stock emerged as the top Sensex gainer post Q3 result announcement.
L&T shares also surged nearly 5% post-Q3 earnings, driven by a record high in new orders. L&T alone contributed over 150 points to the Sensex rally.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
