Indian equity markets demonstrated robust performance for the third consecutive session on Thursday, extending their winning streak. This significant rally was primarily propelled by substantial gains in heavyweight stocks such as Reliance Industries and HDFC Bank, alongside a broad-based buying interest observed across various sectors. Despite the expiry of Nifty derivatives contracts, which often introduces volatility, the market experienced relatively subdued fluctuations, suggesting that much of the expiry-related positioning had been completed earlier in the week.

As of 2:38 PM IST, the BSE Sensex recorded an impressive increase of 884.67 points, or 1.07 percent, reaching 83,646.85. Similarly, the Nifty 50 surged by 263.65 points, or 1.04 percent, to settle at 25,508.40. Both benchmark indices traded near their intraday highs, reflecting a strong bullish sentiment. Among the top performers, shares of HDFC Bank contributed significantly to the rally, climbing 1.83 percent to Rs 2,016.50, while Reliance Industries also saw sharp gains, bolstering the broader market. The broader market sentiment was further supported by expectations of sustained institutional inflows, stable global cues, and an improvement in domestic macroeconomic indicators.

The day's rally, described by some as a surge of over 1,000 points for the Sensex, was attributed to a confluence of three key factors. Firstly, a weakening U.S. Dollar provided a significant boost. The dollar's slip, following critical comments regarding Fed Chair Powell and hints of his potential replacement, fueled hopes of an imminent rate cut by the Federal Reserve. This prospect encouraged global money to flow into emerging markets like India, increasing liquidity and investor confidence.

Secondly, easing geopolitical tensions offered considerable relief to the markets. Specifically, the de-escalation of the Israel-Iran conflict reduced fears surrounding global oil supply disruptions. This positive development supported India’s inflation outlook and improved its fiscal position, contributing to a more stable economic environment.

Lastly, a notable decline in crude oil prices further uplifted market sentiment. Brent crude dropped to $67 a barrel, alleviating inflation worries and enhancing the overall positive mood among investors. This combination of factors created what was described as a "perfect storm" for a bullish trading day. The rally was broad-based, with metal stocks rising by 2.3 percent, and strong gains also observed in banking, financials, energy, and IT sectors. The positive momentum translated into a substantial increase in the BSE market capitalization, which jumped by ₹3.3 lakh crore in a single day.

Analysts emphasize that the recent uptrend in the Indian equity markets is underpinned by robust corporate earnings, a cooling inflation trend, and resilient domestic economic indicators. Looking ahead, investors will be closely monitoring upcoming economic data releases and commentary from global central banks for further guidance and cues on market direction.