Share Market Today / Why is the stock market soaring? Sensex surges 1,500 points in 3 days.

Share Market Today: The Indian stock market has seen a strong rally since last Wednesday. The benchmark Sensex has gained more than 1,500 points, while the Nifty 50 has crossed the 25,000 mark. On Monday, October 6, 2025, the market extended its gains for the third consecutive session, with the Sensex rising 600 points (nearly 1%) to an intraday high of 81,846, and the Nifty 50 also rising nearly 1% to a high of 25,095.95. At the end of the day, the Sensex closed at 81,790.12, up 583 points (0.72%), while the Nifty climbed 183 points (0.74%) to close at 25,077.65. The BSE Midcap index rose 0.68%, while the Smallcap index closed with a slight decline of 0.20%. Let's understand the key reasons for the Indian stock market's rally amid global uncertainties.

Key Reasons for the Market Rise

1. Short Covering Drives Growth

According to experts, recent corrections and short covering in quality stocks have led benchmark indices to higher levels. The IT sector, which was recently under pressure due to the H-1B visa fee hike and other sectoral challenges, made a strong comeback on Monday. The Nifty IT index rose by more than 2% for the third consecutive day, contributing significantly to the market rally.

2. Strength in the Banking Sector

Banking stocks have also provided strong support to the market. The Nifty Bank index has risen continuously for the past four sessions, registering a total gain of more than 3%. The Reserve Bank of India (RBI)'s accommodative stance and the Reserve Bank's (RBI) policy rate freeze have eased margin pressures on banking companies. Pankaj Pandey, Head of Research at ICICI Securities, said, "The RBI's policy has been positive, leading to a strong performance in the BFSI (Banking, Financial Services, and Insurance) sector. The IT and banking sectors, which account for nearly 50% of the Nifty index, are the main drivers of the market rally."

3. Relief from RBI Policies

The RBI's monetary policy was in line with expectations, providing stability and relief to the market. Favorable economic growth and low inflation projections boosted investor confidence. The RBI raised India's GDP growth forecast for FY2026 from 6.5% to 6.8%, while reducing the inflation forecast from 3.1% to 2.6%. RBI Governor Sanjay Malhotra's dovish stance further improved the market sentiment.

4. Valuation and Future Prospects

According to a Motilal Oswal report, the government's reform measures are expected to revive corporate earnings. Along with domestic reforms, a resolution of the tariff-related standoff could be a major external trigger for the market. The brokerage firm believes that the market is likely to rally further due to rising corporate earnings, low interest rates, ample liquidity, and macroeconomic improvements.