After three days of losses, the Indian stock market bounced back on May 21, with the Sensex gaining over 800 points and the Nifty 50 rising more than 1%, adding around ₹4 lakh crore to investors' wealth.
This rally was driven by several key factors. First, short covering in an oversold market encouraged investors to buy top stocks at lower prices. Second, a weakening US dollar boosted emerging markets like India by attracting foreign capital.
Third, despite recent corrections, overall market sentiment remains positive due to India’s strong economic growth outlook and expectations of improved corporate earnings.
Inflation hitting a six-year low has increased hopes for further RBI rate cuts this year.
Fourth, anticipation around a US-India trade deal has influenced market optimism, although volatility may persist until clarity emerges.
Lastly, technical analysis suggests the short-term market trend remains positive if the Nifty 50 holds above 24,400, encouraging investors to focus on strong sectors and avoid aggressive positions.
Overall, a combination of technical, economic, and geopolitical factors fueled today’s market rise.
