The Nifty 50 hit a record high of 26,277.35 in September last year, while the Sensex peaked at 85,978.25 around the same time. On Thursday, the Nifty 50 was just 0.7% below its record, after touching an intraday high of 26,099.70. The Sensex rose as much as 85,272.40, about 0.8% shy of its all-time high.
Below are the five key factors driving the rally:
1. Hopes of India-U.S. trade pact
Expectations of a breakthrough trade deal between India and the U.S. have fueled optimism in equity markets. The two nations are reportedly close to an agreement that would cut tariffs on Indian exports to 15%–16% from around 50%, Mint reported Wednesday.
Market chatter around an imminent accord gained traction after remarks from President Trump and Prime Minister Modi suggested progress, said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“If the reported 15-16 % tariffs on Indian exports to U.S. materialises that would be a big positive for Indian economy and major boost to stock markets. The market rally which has already begun in the festival season will accelerate enabling the Nifty to set new record highs,” said Vijayakumar.
2. FIIs turn buyers
After months of persistent selling, foreign institutional investors (FIIs) have reversed course in October, pouring over Rs 1,385 crore into Indian equities so far this month. The shift from heavy outflows to renewed inflows has buoyed domestic benchmarks and signaled a potential change in sentiment among global investors who had been cautious for much of the year.
The pace of selling has eased considerably compared with prior months, reflecting a sharp pullback from Rs 22,761 crore in September, Rs 41,908 crore in August, and Rs 38,214 crore in July 2025.
Unprecedented record sales in recent months have the potential to improve corporate earnings, said Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, adding that FIIs turning buyers and short covering are factors that could further propel the rally.
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