Why is market rising today? Sensex jumps 800 points, Nifty above 23,050. 5 key factors behind D-Street rebound

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The Sensex climbed 800 points to trade over 74,650, while the Nifty 50 gained 200 points to reach 23,085 in morning trade. Broader markets underperformed, with the Nifty Smallcap 100 slipping into negative territory, while the midcap index traded with marginal gains.

Infosys, UltraTech Cement, TCS, HCLTech, Reliance Industries, Tech Mahindra and Bharti Airtel shares gained 2-3% to lead gains on Sensex. Bucking the trend, Bajaj Finance shares dropped more than 2% to lead losses on the benchmark index.

Among the sectors, Nifty IT jumped more than 2% to lead gains. The overall market breadth however remained negative, with NSE seeing 1,551 declines against 1,253 advances, while 126 stocks remained unchanged.

Today's rise comes after the market opened the week on a subdued note, sliding sharply in the previous session on Monday, with Sensex dropping nearly 900 points. The selloff wiped nearly Rs 5 lakh crore off the combined market value of BSE-listed companies on Monday.

Here are 5 key factors pushing market up today.

1) US-Iran trade deal hopes rise

US President Donald Trump said India and US are "pretty close" to making a trade deal, which will be much different than the earlier pacts. "They want to make a deal. We're going to make a deal. Pretty close, yeah," Trump said in response to a question at the Oval Office on Tuesday. "It's going to be a much different kind of deal than we've done," he said.

Trump's remarks came at a time when US Secretary of State Marco Rubio was visiting India and discussed further strengthening bilateral relations focussing on sectors such as trade, energy, technology, defence and people-to-people ties.

India and US in February had announced the finalisation of the framework for the first phase of the bilateral trade agreement (BTA). However, changes in the tariff landscape in the US have led to further negotiations on the pact. Trump’s latest comments have boosted hopes for th4e deal culminating soon, sparking optimism in the market.

2) Rupee rises as Reliance Jio IPO kicks off

Rupee rose 18 paise to 94.73 against US dollar in early trade on Wednesday. This may have been driven by dollar inflows linked to the Jio Platforms IPO which opens today, as well as the Reserve Bank of India's support. Foreign investors typically use sell or buy swaps to manage their dollar flows for IPO allotments, selling dollars for rupees in the spot market and agreeing to buy them back at a later date, usually less than a week. Once shares are allotted, investors can unwind these positions and sell dollars outright to fund their investments, leading to dollar supply, Reuters quoted traders as saying.

“Going ahead, elevated crude prices remain a key risk, while RBI measures could help limit further weakness. Rupee range can be seen between 94.50–95.25,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency, LKP Securities.

3) Strong earnings

UltraTech Cement was one of the top gainers on Sensex as the heavyweight cement-maker saw its share price rise nearly 3% in morning trade. This came after Jefferies hiked target price after the company reported a consolidated net profit of Rs 1,494 crore for the July-September quarter of the ongoing financial year 2027, marking more than 21% jump from the Rs 1,232 crore net profit reported in the year-ago period.

“Since the two large laggard sectors - IT and banking- have performed well in Q2 and are attractively valued, further corrections in these sectors will be met with strong DII-led accumulation,” said V K Vijayakumar, Chief Investment Strategist, Geojit Investments.

4) Anti AI trade boosts IT stocks

IT stocks were also among the top gainers on the benchmark indices, as the ongoing global rout in AI stocks boosted sentiment for the Indian IT stocks which have been said to have an ‘Anti-AI’ advantage. Infosys and TCS shares jumped around 3% each, who;le HCL Tech and Tech Mahindra shares rose around 2% each.

5) Large cap valuations

While investors are finding relief in today’s rally, the market has overall witnessed strong correction this year amid multiple headwinds including soaring oil prices on the back of the raging Middle East war. However, analysts have been pointing out at attractive valuations following the recent correction.

Mahesh Nandurkar, equity analyst at Jefferies, said the risk-reward equation is becoming more favourable for largecaps because of their better relative valuations against midcaps, while the earnings growth gap is expected to narrow over FY26–28. Largecaps currently trade at a 30% valuation discount to midcaps, compared with a 10-year average discount of 20%, according to Nandurkar. At the same time, the earnings growth gap between the two segments is expected to narrow materially over the period.

“We believe risk-reward is becoming more favorable for largecaps on better relative valuations vs. Midcaps, while the earnings growth gap is narrowing over FY26-28E,” Nandurkar said in a recent report.

What lies ahead for Dalal Street?

While the market is rallying, caution is still warranted. Oil prices crossed $110 per barrel while bond yields continue to rise. “With Brent crude prices and US bond yields remaining elevated, the market is likely to remain under pressure. The sell on rally market construct will continue in the near-term. However, the improving earnings growth, fair valuations of large-caps, and strong domestic liquidity will support the market on declines,” said Vijayakumar from Geojit Investments.

“Since the Q2 results season has started on a positive note and some positive surprises are likely in the broader market, the market action, going forward, will be more stock-specific and results-sensitive. Despite the external headwinds, this is a stock picker’s market now,” he added.

Technical view on Nifty

The mean reversion pull back having unfolded on anticipated lines, Anand James, Chief Market Strategist at Geojit Investments, remains hopeful towards resumption of Nifty’s upmove.

Alternatively, the index’s slippage past 22,840 and 22,780 would significantly dilute the upside prospects, but the analyst will wait for a fall past 22,700 to completely abandon such hopes, he said.