Indian markets, rupee reverse 2025’s losses

Bengaluru: The Indian stock markets and the rupee have recovered all of their losses in 2025 so far. Benchmarks BSE Sensex and NSE Nifty rose 1.4 per cent and 1.32 per centrespectively on Monday, as foreign institutional investors turned net buyers. Meanwhile, rising for the seventh straight session, the rupee appreciated 31 paise to close at 85.67 against the US dollar, helped by lower global crude price levels and continuing weakness in the greenback.

Return of FIIs after a prolonged period of selling, bargain hunting at lower levels, better valuations and the Federal Reserve signalling two rate cuts in 2025 have boosted investor sentiment.

On Monday, the 30-share Sensex rose 1,078.87 points to settle at an over six-week high of 77,984.38. During the day, it surged by 1.56% to 78,107.23. The 50-share Nifty rose 307.95 points to 23,658.35. Intra-day, the benchmark zoomed 1.53 per cent.

So far in March, the Sensex has shot up 4,786.28 points or 6.53 per cent. In six trading days including Monday, Sensex investors were left richer by more than Rs 27 lakh crore. It had tanked 5.55 per cent in February, while in January its net decline was 0.81per cent.

"The domestic market experienced a robust rally, spurred by value buying as valuations returned to long-term averages and early indications of earnings growth recovery emerged,” said Vinod Nair, Head of Research, Geojit Investments Ltd. 

“Increased government spending and expected monetary easing are anticipated to boost optimism in rate-sensitive sectors such as banking, NBFCs, auto, consumer durables, and real estate, leading to potential outperformance. The sustainability of this trend will depend on upcoming PMI data, Q4 earnings results, and developments related to reciprocal US tariffs," Nair said.

The BSE midcap gauge jumped 1.32 per cent and smallcap index climbed 1.17 per cent on Monday. All BSE sectoral indices ended higher, with bank-ex rallying 2.53 per cent, utilities 2.42 per cent, power 2.31 per cent, industrials 2 per cent and financial services 1.97 per cent.

Vishnu Kant Upadhyay, AVP – Research & Advisory, Master Capital Services, said that overall market sentiment has shifted from a ‘sell on rise’ approach to a ‘buy the dip’ strategy, reflecting renewed bullish momentum. 

The optimism in equity markets helped the rupee as well, which too wiped off all its losses in 2025, supported by fresh foreign capital inflows. However, lurking risks -- ranging from liquidity constraints to reciprocal tariff implementations -- continue to pose challenges for the local unit.

At the interbank foreign exchange, the rupee opened at 85.93, then touched an intraday high of 85.49 and a low of 86.01 against the dollar. The unit ended the session at 85.67 (provisional), registering a gain of 31 paise from its previous closing level.

NEW DELHI: RUPEE VS DOLLAR. PTI GRAPHICS.(PTI03_24_2025_001010001B)

"Rupee traded positive, driven by strong FII buying over the last few days, which has reversed the fund flow impact. Additionally, expectations of Russia-Ukraine truce talks have kept market liquidity active, further supporting the rupee's momentum,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.