The domestic stock market extended its rally for the sixth consecutive session on Monday, with the Sensex soaring over 1,000 points and the Nifty50 closing above 23,650, driven by gains in banking and energy stocks. Analysts attribute this surge to improving domestic economic cues, falling U.S. Treasury yields'making emerging markets like India more attractive'and a return to value buying as valuations normalize. Foreign Institutional Investors (FIIs) have turned net buyers in three of the last four sessions, reversing months of selling, while central bank liquidity measures have further boosted sentiment. However, the rally's sustainability will depend on Q4 earnings results and developments surrounding U.S. tariffs.

The S&P BSE Sensex surged 1,078.87 points, or 1.40%, to 77,984.38. The Nifty 50 index rallied 307.95 points, or 1.32%, to 23,658.35. In the six consecutive sessions, both the indices jumped 5.63% each.

SBI (up 3.77%), Reliance Industries (up 1.95%) and HDFC Bank (up 1.77%) boosted the indices.

In the broader market, the S&P BSE Mid-Cap index advanced 1.32%, while the S&P BSE Small-Cap index jumped 1.17%, reflecting strong investor confidence.

Market breadth remained robust, with 2,986 stocks advancing against 1,068 declining on the BSE, while 112 remained unchanged.

Meanwhile, the NSE's India VIX, a measure of expected market volatility, spiked 8.94% to 13.70, signaling heightened investor caution despite the ongoing rally.

Economy:

The HSBC Flash India Composite Output Index ' a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors ' was down marginally from February's final reading of 58.8 to 58.6 in March. The latest figure was above its long-run average of 54.7 and indicated a sharp rate of expansion. The slowdown reflected a softer increase in services activity, as factory production rose at the quickest pace since July 2024.

Pranjul Bhandari, Chief India Economist at HSBC, said: India's manufacturing sector expanded at a faster pace in March, according to the flash PMI. The output index rose to its highest level since July 2024. Yet the margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year. The moderation in new export orders growth was also noteworthy amid tariff announcements.

Numbers to Track:

The yield on India's 10-year benchmark federal paper gained 1.86% to 6.743 as compared with the previous close of 6.620.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 85.61, compared with its close of 85.98 during the previous trading session.

MCX Gold futures for the 4 April 2025 settlement shed 0.02% to Rs 87,757.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.19% to 103.89.

The United States 10-year bond yield rose 0.89% to 4.290.

In the commodities market, Brent crude for May 2025 settlement gained 41 cents or 0.57% to $72.57 a barrel.

Global Markets:

US Dow Jones index futures rose 308 points, signaling a strong opening for US stocks today. Media reports suggest that President Donald Trump's April 2 tariffs will be narrower and less stringent than initially feared, easing concerns about their economic impact.

European shares advanced on Monday as investors kept an eye on preliminary purchasing managers' index data from the U.K., France, Germany and the euro zone to get a gauge of business activity in the region's manufacturing and services sectors.

Asian stocks ended mixed on Monday as investors braced for Trump's looming April 2 tariff deadline.

In Japan, business activity shrank for the first time in five months. The au Jibun Bank Manufacturing PMI fell to 48.3 in March, down from 49.0 in February, marking its ninth consecutive month of contraction. Meanwhile, the Services PMI dropped to 49.5 from 53.7, the first decline since mid-2024. A PMI reading below 50 indicates contraction.

Meanwhile, Chinese Premier Li Qiang warned of 'rising instability' and urged nations to open up their markets.

On Friday, US market closed higher as Trump hinted at flexibility on tariffs, although he reaffirmed the April 2 deadline for reciprocal duties.

The S&P 500 rose 0.08% to 5,667.56 points, while the NASDAQ Composite rose 0.52% to 17,784.05 points. The Dow Jones Industrial Average rose 0.08% to 41,985.35 points.

Nike stock slipped over 5% after the fiscal fourth-quarter revenue estimate came in below analysts' expectations.

While stocks have rebounded from oversold levels, investors remain cautious. Until there is clarity on the tariff situation'expected by April 2'the market's upside potential will likely remain limited.

Stocks in Spotlight:

The Nifty Bank index climbed 2.20% to 51,704.95. The index is up 8% in eight consecutive sessions. Kotak Mahindra Bank (up 4.86%), Canara Bank (up 4.35%), Federal Bank (up 4.29%), Bank of Baroda (up 3.83%) and SBI (up 3.69%) rallied today.

City gas distribution stocks rallied today on proposed new developments from the regulator. Gail (India) (up 3.78%), Indraprastha Gas (up 2.42%) and Mahanagar Gas (up 0.63%) jumped. The Petroleum and Natural Gas Regulatory Board (PNGRB) is proposing sweeping changes on zonal tariffs which should lower operating costs and boost prices for producers. These changes would amend the Natural Gas Pipeline Tariff Regulations of 2008, and the board is inviting public comments on the proposed amendments until April 11, with finalization expected by June 2025. Analysts estimate that if the changes are implemented it would more than +2x India's natural gas adoption from 6% currently to 15%.

Larsen & Toubro (L&T) rose 1.87% after the firm said that Subramanian Sarma will be elevated from whole-time director & president, Energy to deputy managing director (MD) & president of the company with effect from 2nd April 2025.

Meanwhile, the company's subsidiary, L&T Energy Green Tech and John Cockerill signed a memorandum of understanding (MoU) to explore various technologies in concentrated solar power (CSP) and thermal energy storage (TES).

Godrej Properties (GPL) added 2.41% after the company announced the acquisition of approximately 10 acres of land in Yelahanka, Bengaluru, for a new development project with an estimated revenue potential of Rs 2,500 crore.

J Kumar Infraprojects advanced 3.22% after the company received a letter of acceptance (LoA) worth Rs 1,020 crore from CIDCO for a construction project in Navi Mumbai.

Power Mech Projects surged 16.43% after the company announced that it had received an order worth Rs 579 crore from Bharat Heavy Electricals (BHEL) for the 2x800 MW Damodar Valley Corporation (DVC) Koderma TPS Phase-II in Jharkhand.

RailTel Corporation of India jumped 5.83% after the company announced that it had received a work order worth Rs 25.15 crore from Hindustan Petroleum Corporation (HPCL).

NCC gained 1.50% on securing Rs 1,480 crore order for Darbhanga Medical College redevelopment.

GHV Infra Projects rose 2% after the company announced that it has received work order worth Rs 191 crore from GHV (India) for supply, installation, commissioning & testing of Flue Gas Desulphurization (FGD) system.

Salasar Techno Engineering surged 20% after the company announced that its board will meet on 26 March 2025, to consider the proposed amalgamation of EMC, its wholly owned subsidiary, with the company.

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