(26 May) Sensex, Nifty Surge: India's Market Rallies as Global Tensions Ease & Economy Shines

The Indian equity market had a strong showing on Monday, 26 May 2025, with benchmark indices climbing significantly. This positive momentum was driven by a combination of favourable global cues and important domestic developments, creating widespread optimism among investors. The day's performance highlighted the market's sensitivity to both international trade dynamics and India's growing economic story.

Table of Contents:

1. Introduction
2. Performance of Key Market Indices: Nifty and Sensex
3. Major Market Developments Influencing the Day’s Performance
4. Institutional Investment Activity
5. Primary Market Activity and Market Sentiment
6. Equity Market Movers
7. Economic and Global Factors Impacting Markets
8. Concluding Summary

Nifty and Sensex Today – Key Market Indices Performance

Indian equity benchmarks started the trading session with solid gains, reflecting positive sentiment from Asian markets and a temporary ease in trade tensions between the United States and the European Union. Investors closely watched the final stages of Q4 earnings announcements and broader global developments.

Daily Movement and Closing Figures

• Sensex: Opened at 81,928.95 (previous close: 81,721.08). It surged over 750 points during intraday trade, reaching a high of 82,492.24. The Sensex closed the day at 82,176.45, marking a gain of 455.37 points (0.56%).
• Nifty50: Began trading at 24,919.35, confidently moving past the crucial 25,000 mark early in the session and hitting an intraday high of 25,079.20. It finished the day at 25,001.15, adding 148 points (0.60%).

Both the Sensex and Nifty maintained their positive momentum throughout the day.

Top Stock Market News of the Day – What Moved the Markets

The Indian stock market's strong performance was largely influenced by a mix of significant domestic developments and positive global signals.

Major Domestic News Events

• India Becomes World's Fourth-Largest Economy: NITI Aayog CEO B.V.R. Subrahmanyam announced that India has surpassed Japan. It's projected to overtake Germany in 2.5-3 years to claim the third spot. The IMF forecasts India's GDP at $4.187 trillion in FY26, exceeding Japan's estimated $4.186 trillion for CY2025.
• RBI's Bumper Dividend to Government: A record dividend payment of ₹2.69 lakh crore for FY25 is expected to significantly boost government finances and help control the fiscal deficit target for FY26 at 4.4%. This should also help maintain low inflation and declining interest rates.
• Early Monsoon Arrival: The India Meteorological Department (IMD) reported an early monsoon arrival in Kerala, eight days ahead of schedule. This is the earliest onset in 16 years and is expected to positively impact agricultural activity and the rural economy.

Significant Global News Events

• Trump Delays EU Tariffs: US President Donald Trump postponed planned 50% tariffs on EU imports from 1 June to 9 July. This offered temporary relief to global investors, easing trade war concerns.
• Dollar Weakness: The US dollar index has been declining for three consecutive sessions, nearing a one-month low. This supported emerging markets like India, encouraging foreign capital inflows. The Indian Rupee opened with gains (+17 paise to 85.05 against USD).
• Asian Markets Performance: Most Asian markets traded higher, with Japan's Nikkei up 0.7% and South Korea's Kospi also up 0.7%. Australia's ASX 200 remained largely flat.
• US Markets Status: US markets closed lower on Friday due to profit booking. US stock futures edged up early Monday. Markets were closed on 26 May for Memorial Day.

Commodities Check:

• Gold: Domestic gold futures edged lower (MCX 5 June contracts down 0.51% at ₹95,930/10 grams) as improved trade sentiment softened safe-haven demand.
• Oil: Prices edged up marginally in early Asian trade as overall sentiment improved, though gains were limited by oversupply worries. Brent crude futures were up 0.28% to $64.96/barrel, and US WTI crude was up 0.28% to $61.7/barrel.

FII and DII Activity Today – Where Big Money Moved

The flow of institutional funds provides crucial insights into market sentiment and liquidity.

Trends in Foreign Institutional Investor (FII) Activity

Their Impact on Market Sentiment

The return of FPI buying on Friday supported Monday's positive opening. Consistent DII buying provided a strong domestic cushion, counter-balancing foreign outflows and contributing to market resilience and stability.

IPOs, Listings, and Market Buzz – Latest Stock Market Trends

The primary market saw significant activity, with a notable difference between mainboard and SME segments.

IPOs Opened Today:

• Aegis Vopak Terminals Limited IPO (Mainboard): Aiming to raise ₹2,800 crore (fresh issue). Price band: ₹223-235/share. Minimum retail investment: ₹14,049 (63 shares). Closes: 28 May. Tentative Listing: 2 June 2025.
   
• Schloss Bangalore Limited IPO (Leela Hotels Parent, Mainboard): Seeking to raise ₹3,500 crore (₹2,500 cr fresh issue, ₹1,000 cr OFS). Price band: ₹413-435/share. Minimum retail investment: ₹14,042 (34 shares). Closes: May 28th. Tentative Listing: 2 June 2025.

Grey Market Premium (GMP) Trends and Subscription Updates

• Aegis Vopak Terminals: Saw a muted response on Day 1 (7% subscribed overall by 2 PM). GMP: ₹10-₹14.5/share (4-6.17% listing gains expected). Analysts recommended long-term subscribe.
   
• Schloss Bangalore (Leela Hotels): Also received a muted response on Day 1 (0.05% subscribed overall by midday, 5% by 2:55 PM). GMP: ₹13-₹16/share (3-3.68% listing gains expected). Mixed recommendations due to high valuation.

There was a significant disparity in investor interest, with SME IPOs attracting strong subscriptions and high GMPs compared to mainboard IPOs, indicating a speculative bias for quick profits.

Top Gainers and Losers – Best and Worst Performing Stocks

Individual stock performance reflected a complex interplay of company-specific news and macro factors.

Top Performing Stocks

• Tata Motors: Zoomed approximately 2% due to delayed US-EU tariffs, easing trade war concerns.
• Divi's Labs: Surged 4% on a long-term manufacturing and supply agreement and robust Q4 earnings (net profit +23% Y-o-Y, revenue +12%).
• BEML Ltd: Gained 12.50% (top mid/small-cap gainer, closed +15.51%).
• GE Vernova T&D India Ltd: Rose 10.00%.
• Finolex Industries Ltd: Saw a gain of 7.06%.
• ICICI Bank and HDFC Life: Both touched 52-week highs.

Worst Performing Stocks

• Eternal (Zomato): A significant laggard, declining 3.9%, primarily due to heavy FII selling ($1.3 billion) and fears of MSCI index exclusion.
• Balkrishna Industries Ltd: Shares slumped nearly 10% after Q4FY25 results showed a 25% YoY drop in net profit to ₹362 crore.
• Future Lifestyle Fashions Ltd: Experienced a decline of 5.30%.
• TeamLease Services Ltd: Fell by 4.77%.

Economic and Global Factors – What Else Affected Markets

A range of economic and global factors played a pivotal role in shaping investor sentiment.

Key Domestic Economic Updates

• RBI Decisions and Monetary Policy: The repo rate was cut by 25 bps to 6% on 9 April 2025 (the second consecutive cut). The stance shifted to 'accommodative'. RBI projects real GDP growth at 6.5% for FY26 and CPI inflation at 4% for FY26. The record ₹2.69 trillion dividend to the government is expected to boost finances and help contain the fiscal deficit.
• Inflation Numbers: CPI inflation projected at 4% for FY26, strengthening the case for potential future rate cuts.
• Crude Oil Updates: Global crude oil prices edged up slightly, but gains were limited by oversupply worries. Brent crude futures were up 0.28% to $64.96/barrel, and US WTI crude was up 0.28% to $61.7/barrel.
• Rupee Movement: The Indian Rupee strengthened against the US dollar, rising 17 paise to 85.05.

Broader Global Economic Landscape

• US Federal Reserve News: Held interest rates steady at 4.25-4.5%. Adopted a "wait-and-see" approach. Acknowledged modest economic growth, inflation slightly above 2% target, but increased risks from trade policy.
• Global Geopolitical Factors: The temporary delay of US tariffs on EU imports provided significant relief. US markets were closed for Memorial Day. UK inflation surged (2.6% to 3.5%). RBA cut its policy rate by 25 bps to 3.85%.
• India's Favourable Position: Proactive domestic policy (RBI's accommodative monetary policy, substantial dividend) positions India favorably amidst cautious approaches in developed economies, making it an attractive investment destination.

Final Takeaway – Summary of Stock Market Day

The Indian stock market concluded 26 May 2025, on a decidedly positive note, reflecting a strong interplay of global and domestic factors. Both the Sensex and Nifty recorded healthy gains.

The market's robust rally on 26 May is a prime example of a positive feedback loop between global de-risking and strong domestic fundamentals. The global trade reprieve acted as an immediate trigger, unlocking pent-up demand and risk appetite.

This was then powerfully reinforced by India's compelling internal narrative of economic ascension, fiscal strength, and favourable agricultural prospects. For investors, this signifies that while global developments can provide the initial impetus, a solid domestic foundation is crucial for sustaining and amplifying such positive momentum, making India an attractive destination for capital seeking both stability and growth.