Benchmark equity indices Sensex and Nifty closed the trading session on Monday in the positive territory. This marked the sixth consecutive session that recorded huge rallies for the indices. Investors remained optimistic as the key indices climbed more than 1 per cent each during the intra-day trade.

The BSE Sensex settled for the day near 78K, surging more than 1,050 points or 1.40 per cent in the session. Meanwhile, the NSE Nifty50 ended trading above 23,650, jumping over 300 points or 1.32 per cent.

On the 30-share Sensex platform, NTPC, Kotak Mahindra Bank, State Bank of India, Tech M, and PowerGrid closed the day in green. Meanwhile, the laggards in the session included Titan, IndusInd Bank, Zomato, M&M, and Bharti Airtel.

In the broader markets, the Nifty Bank index dominated the session and ended 2.20 per cent higher. Sectorally, the PSU Bank and Private Bank indices climbed high and closed 3.18 per cent and 2.42 per cent higher respectively. 

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What Led To The Rally In The Market?

Analysts believe several factors contributed to the positive sentiment in the market. Buying in banking stocks helped boost the domestic equities. Further, US President Donald Trump's administration indicated that there might be some 'flexibility' in the reciprocal tariffs expected from the Western superpower. This reignited hopes among investors. 

The possibility of smoother tariffs also added to hopes of an improvement in the relations between US and China, which in turn could have a positive impact on the American and global markets. 

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, explained, "Short covering ahead of monthly F&O expiry later this week fuelled the rally as the Sensex breached the psychological 78k mark intra-day on across-the-board buying. Renewed optimism by foreign investors coupled with strong US and European market cues further bolstered the sentiment."

Rupee, FIIs, And Oil Prices

Sundar Kewat of Ashika Institutional Equity observed that the bullish momentum of the market remained intact as all sectors ended on a high note, with bank stocks leading the charge. The global oil benchmark Brent crude inched up 0.07 per cent to touch $72.21 a barrel.

On Friday, foreign institutional investors (FIIs) infused Rs 7,470 crore in the equities segment, boosting market confidence. Meanwhile, the Indian rupee closed 34 paise higher at 85.63 against the US dollar on Monday. Vinit Bolinjkar, Head of Research at Ventura, attributed this appreciation in the domestic currency to favourable sentiment and the policies of the Reserve Bank of India.