Why is market rising today? Sensex jumps 850 points, Nifty above 22,900. 6 key factors behind Rs 5 lakh crore gains

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Broader markets also gained, with Nifty Smallcap 100 and Nifty Midcap 100 rising up to 0.6%.

Sensex jumped more than 600 points to rise above 73,860 while Nifty 50 gained 175 points to near 22,875. Broader markets also gained, with Nifty Smallcap 100 and Nifty Midcap 100 rising up to 0.6%. The sharp gains added nearly Rs 3 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to more than Rs 475 lakh crore.

Adani Ports shares jumped more than 4% to lead gains on Sensex, while Power Grid, Kotak Mahindra Bank, HUL, NTPC, ITC, Reliance Industries, Titan, TCS and Infosys shares gained 1-3%.

Among the sectoral indices, Nifty FMCG gained around 2% to lead gains, while Nifty PSU Bank, Nifty IT and few others gained up to 1%. Nifty Auto, however, slipped into the red. The overall market breadth remained positive, with NSE seeing 1,995 advances against 1,228 declines, while 105 stocks remained unchanged.

Here are the key factors boosting market today:

1) Fed holds rates

The Federal Reserve kept its key rate unchanged at about 3.9% despite stubbornly high inflation, as Chairman Kevin Warsh suggested its policies are already showing signs of having an impact. This came after a quarter-point interest rate hike last month, marking the first time in three years

While Warsh didn’t provide too much insight into what the Fed may do next, most economists still expect the central bank to hike its key rate another quarter-point at its next meeting on December 8-9. Wall Street investors now see the odds of an increase at nearly 85%, according to CME Fedwatch.

2) Rising hopes for LTCG tax cuts

The rise in the Indian stock market also comes amid rising hopes for a rejig to India’s long-term capital gains tax (LTCG), which was triggered recently after Finance Minister Nirmala Sitharaman said discussions around long-term capital gains tax (LTCG) and securities transaction tax (STT) were ongoing.

A potential cut in India’s long-term capital gains tax (LTCG) could offer foreign investors a reason to return to a market they have steadily abandoned, with banks, energy companies and other largecaps positioned to benefit the most, according to Jefferies.

Also read | Potential LTCG tax cut could revive FIIs’ India bet, says Jefferies: Which stocks may benefit most?

3) FII buying

Foreign investors remained net buyers of Indian equities worth around Rs 872 crore on Wednesday, according to provisional data on NSE. FIIs have been sparsely buying Indian equities recently after a sharp selloff earlier that rattled the market. FIIs net bought Indian equities worth Rs 4,198 crore on Tuesday, Rs 2,098 crore on Friday and so on. A definitive trend reversal is however yet to be confirmed by analysts.

Also read | NSE shares hit record low as IPO lock-in expiry frees up stake worth Rs 3,247 cr for trading. How has the stock performed since listing?

4) Rupee gains

The Indian rupee increased 11 paise to 95.17 against the US dollar amid a slight easing in the American greenback following the US Federal Reserve's policy announcement. At the interbank foreign exchange market, the rupee opened at 95.20, then gained ground and touched 95.17 against the US dollar, registering a rise of 11 paise over its previous close.

“The Indian rupee is likely to consolidate around the 95-per-dollar mark, with a mild recovery bias following its rebound from recent lows. The softer US dollar, declining two-year Treasury yields and gains across Asian currencies following the Fed’s modestly dovish signals may provide near-term support. However, elevated Brent crude prices near $115 per barrel, persistent dollar demand and expectations of a potential Fed rate hike in December could continue to weigh on the domestic currency,” said Kaveri More, Commodity Technical Analyst, Choice Broking.

5) Bond yields cool down

The bond yield on the benchmark 10-year US Treasury notes eased back below the key psychological mark of 5%. The 30-year bond yields fell to 5.3% while that on the 2-year notes, which moves in tandem with Fed rate decision expectations, dropped to 4.69%.

Falling bond yields make the debt market less attractive when compared to the equity markets, which typically boosts the latter.

6) Attractive valuations

While the market is recovering some losses, Sensex and Nifty continue to remain significantly lower this year. However, analysts have pointed out attractive pockets of valuations after the sharp selloff.

“We see value in more parts of the market, as valuations have come off sharply across sectors and stocks. Market multiples are reasonable, although we focus less on top-down index valuations,” Kotak Institutional Equities said in its latest Strategy report.

Also read | Diwali 2026: Sensex plunged 10,000 points, Nifty dropped 12% since last Diwali. Will Samvat 2083 bring some relief?

Why caution is still warranted for Dalal Street?

The Federal Reserve holding rates as expected is mildly positive for equity markets globally, said V K Vijayakumar, Chief Investment Strategist at Geojit Investments. However, from the Indian perspective, the headwinds continue to be strong, he noted. The 10-year US bond yield continues to hover around 5% and there are no signs of easing in crude prices.

Reports that the chip shortage issue will persist up to 2030 have brought interest back into the chip stocks and AI trade in South Korea and Taiwan. This means that foreign money will continue to chase AI and AI- related stocks, ignoring India, the analyst said.

“There is increasing hope now regarding LTCGs tax relief in the coming Budget. It appears that this is no longer a matter of choice. Capital flight of this magnitude ($31 billion so far in 2026) is impacting India’s macros. With crude remaining elevated for long, trade and current account deficits will widen, leading to depreciation of the rupee and the consequent imported inflation. This will further aggravate the high inflation which will continue rising in the context of the hugely deficient monsoon this year,” he added.

Technical view on Nifty

With directional momentum missing, Anand James, Chief Market Strategist at Geojit Investments, expects Nifty swings on either side of 22,725 initially.

“For now, 22,840 and 22,500 are likely to restrain swings, but we would be encouraged to pursue up moves aiming 23,050-23,600 as long as a close below 22,660 is not seen,” he added.