Stock market today: Sensex, Nifty 50 jump over 1% each after Economic Survey 2025; 5 key reasons behind market rally

Stock Market Today: The Indian stock market benchmark indices, Sensex and Nifty 50, ended Friday’s session, January 31, with stellar gains, extending their winning streak for the fourth straight session as hopes built that the government may continue its focus on capex and announce measures to boost consumption in the upcoming Union Budget, which is scheduled to be presented in Parliament tomorrow.

The Nifty 50 ended 259 points higher, or with a 1.11% gain, at 23,508, while the BSE Sensex finished the session at 77,500, up 0.97% (or 740 points) from Tuesday’s close.

The broader market also extends the rally, with the Nifty Midcap 100 index gaining 1.89% to 53,712, and the Nifty Smallcap 100 index ending the session even higher, with a gain of 2.11% at the 16,910 level.

Finance Minister Nirmala Sitharaman tabled the Economic Survey report in the Lok Sabha today ahead of the presentation of Union Budget 2025-2026 on Saturday, 1 February 2025. 

According to the survey, India’s FY26 GDP growth is expected in the range of 6.3-6.8 per cent amid global uncertainty. The survey expects inflation to remain under control while consumption could remain stable. It also expects rural demand to gain traction going forward.

Here are 5 key reasons behind the stock market rally today:

Budget Hopes

Market is witnessing a pre-Budget rally amid expectations of pro-growth policies. PM Modi’s speech ahead of the Budget Session also sparked fresh speculation on the government’s financial roadmap. Addressing the media ahead of the Budget Session, Modi’s reference of “inclusion, investment, and innovation,” fueled hopes of measures targeting economic relief, tax benefits, and women-centric initiatives.

“The Budget – expectations and actuals – will influence the market today and tomorrow. Since we are going into the Budget without a pre-Budget rally, the probability of a rally, post Budget, will be high if the Budget delivers on growth stimulating initiatives like cuts in personal income tax. But it is important to understand that the impact of the Budget will last only for a few days, at best. The medium to long-term trend of the market will be dictated by GDP and earnings growth. Therefore, investors should look for cues on these crucial macro trends,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Market is strongly reacting to corporate results with good results being rewarded and poor results getting punished. This has spiked the market volatility. Fairly-valued high quality largecap financials continue to be a safe sector for investors, he added.

Positive Global Cues

Global market cues remain supportive for the domestic equity markets. Asian markets were higher, while the US stock market rallied overnight. Japan’s Nikkei gained following a rally on Wall Street driven by Tesla, IBM and Meta Platforms after strong profit reports.

RBI Rate Cut Optimism

While the US Federal Reserve kept the benchmark interest rate unchanged in its January policy meeting, there are hopes that the Reserve Bank of India (RBI) will shift its interest rate stance in the upcoming policy.

Recently, the RBI announced a set of forex, money market and interest rate measures that will collectively infuse ₹1.5 trillion liquidity into the system over a period of time. Economists believe the RBI’s liquidity measures are a clear signal of intent and set the stage for an interest rate cut.

“With the RBI now turning more judicious on its INR defense – that the policy trilemma could tilt more toward letting the INR find its equilibrium to some extent, and provide some policy flexibility to the RBI on rate settings in general. This opens up space for a February 2025 repo rate cut, with more liquidity measures still needed after the recent announcement of ₹1.5 trillion worth of liquidity infusion,” said Madhavi Arora, Lead Economist at Emkay Global Financial Services.

Large-cap Heavyweights Support

Rally in large-cap heavyweight stocks lifted the benchmark Nifty 50 above 23,500 level on Friday. Tata Consumer Products, Nestle India, Bharat Electronics, Trent and Hero MotoCorp were the top gainers on the Nifty 50 index. Around 47 stocks in the Nifty 50 index were in the green.

Technicals

The benchmark Nifty 50 index continued its winning spree and surpassed its pivotal resistance of 23,350 – 23,400 levels on the daily charts. The recovery in the heavyweights have slightly uplifted the near-term support for the benchmark towards the 23,100 – 23,000 zone.

“As we near the Union Budget session, it is anticipated that the market will experience fluctuations and increased volatility. Investors are encouraged to adopt a focused, stock-centric strategy, carefully evaluating individual stocks rather than trying to time broader market movements,” said Sameet Chavan, Head Research, Technical and Derivative – Angel One.

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