Sensex jumps over 2,100 points in 4 days; investors earn ₹12 lakh crore; 5 key factors that drove the rally

Bulls Charge Ahead: Sensex Rises 2,100 Points in 4 Days

The Indian equity market is riding a wave of optimism, with the BSE Sensex rallying over 2,100 points in just four consecutive sessions, from June 21 to June 26, 2025. This spectacular performance has added a staggering ₹12 lakh crore to investors' wealth, taking the total market capitalisation of BSE-listed companies to over ₹430 lakh crore.

This sharp rally marks a significant turnaround from the cautious sentiment that dominated markets earlier in the month, and has sparked renewed interest among both domestic and foreign investors.

1. Strong Global Cues and Risk-On Sentiment

One of the primary drivers of this market momentum has been positive global cues, especially from the U.S. and European markets. Expectations of a soft landing for the U.S. economy, cooling inflation data, and possible rate cuts from the Federal Reserve in late 2025 have uplifted global risk appetite.

"There’s been a decisive shift in global investor sentiment as inflation trends lower and rate cut prospects improve. Indian equities, being part of the emerging markets basket, are benefiting from this global tailwind,” said Vinay Chhabria, Chief Market Strategist at Trust Capital.

Asian markets have also mirrored this optimism, with indices in Japan, South Korea, and Hong Kong posting gains. India’s strong macroeconomic fundamentals further position it as a preferred investment destination.

2. Robust Domestic Economic Indicators

Domestically, India’s macro data continues to be resilient. The Q4 FY25 GDP growth came in at 7.6%, beating analyst estimates. Manufacturing PMI remains in expansion territory, while GST collections and core sector output have shown consistent strength.

These indicators have reinforced the view that India’s economic growth is broad-based and sustainable, making equities a compelling bet for long-term investors.

"Domestic demand remains strong, private capex is picking up, and credit growth is healthy. This is fueling a re-rating of India’s growth prospects,” said Shalini Mehrotra, Senior Economist at Axis Securities.

3. Sustained Buying by Foreign Institutional Investors (FIIs)

After months of net outflows, Foreign Institutional Investors (FIIs) have turned net buyers once again. In the past week alone, FIIs have poured in over ₹9,800 crore into Indian equities, primarily focusing on large-cap and banking stocks.

This reversal comes on the back of improved earnings visibility, political stability post-elections, and better-than-expected corporate performance in Q4.

"FII flows are a significant market driver in India. Their renewed confidence is reflective of long-term structural positives and robust policymaking,” explained Gaurav Dalmia, Portfolio Manager at Dalmia Investments.

4. Banking and IT Stocks Lead the Rally

Among sectors, banking, financial services, and IT have led the rally. Heavyweights like HDFC Bank, ICICI Bank, Infosys, and TCS witnessed strong buying interest, driven by positive earnings guidance and valuation comfort.

Public sector banks also participated in the uptrend, with many hitting fresh 52-week highs.

The Nifty Bank index alone has surged over 5% in the last four sessions, contributing significantly to the Sensex gains.

"The market is pricing in strong credit growth, lower NPAs, and improved net interest margins for banks. For IT, the worst of the demand slowdown may be behind us,” said Mehul Shah, Head of Equities at Prudent Financials.

5. Short-Covering and Retail Participation Add Fuel

A mix of short-covering by traders and increased retail investor participation via SIPs and direct equity buying has further fueled the rally.

Retail investors have continued to pour funds into equity mutual funds, with SIP flows touching a new high of ₹20,400 crore in May 2025. Meanwhile, the broader participation from tier-2 and tier-3 cities is increasing depth and stability in the market.

"Retail investors now have better access to financial education and platforms, which is leading to disciplined and sustained market engagement,” observed Divya Bansal, Co-founder at FinNest Advisory.

Market Snapshot: Where Do We Stand Now?

• BSE Sensex: Up over 2,100 points since June 21, now hovering around 79,300 levels

• Nifty 50: Up nearly 650 points in the same period, trading above 24,100

• Market Capitalisation: ₹430 lakh crore, up ₹12 lakh crore in 4 days

• Top Gainers: HDFC Bank, ICICI Bank, Infosys, Reliance Industries, Larsen & Toubro

Investor Outlook: Is There More Steam Left?

While the current momentum is strong, market experts caution against complacency. Valuations in some sectors, particularly mid- and small-caps, are now stretched. However, given the strong economic and earnings backdrop, most analysts remain constructively optimistic.

"Investors should avoid chasing momentum blindly. Instead, focus on quality stocks, remain diversified, and align portfolios with long-term goals,” advised Ajay Mittal, CIO at Visionary Wealth.

A mild consolidation or profit booking cannot be ruled out in the near term, especially ahead of key triggers like monsoon progress, upcoming GST Council meeting, and global central bank updates.

The Indian equity markets have demonstrated resilience and strength, with a sharp 2,100-point rally in just four sessions. Investors have gained ₹12 lakh crore in market wealth, marking a vibrant comeback after a muted phase earlier in June. While tailwinds remain supportive, the path ahead will require vigilance and a balanced investment approach.

As the Sensex inches closer to the 80,000 milestone, the mood on Dalal Street is buoyant—but measured optimism is the way forward.