After seeing its biggest single-day fall on Monday, benchmark indices extended gain for the third consecutive session on March 26.
The BSE Sensex reclaimed its 30,000 levels before the stimulus package announcement from the government but has wiped out about 40 percent gains since.
The index was trading at 29,380.69, up 844.91 points or 2.96 percent.
The Nifty50 also crossed 8,700 intraday, but now was trading at 8,542.40, up 224.55 points or 2.70 percent.
The broader markets also gained momentum with the Nifty Midcap and Smallcap indices rising 3 percent each.
On the sector front, the Nifty Bank, Realty, Auto, FMCG, IT, Metal, Pharma, Realty and Infra gained 1-6 percent.
Here are 5 key factors which are driving market higher:
Economic Stimulus Hope
The government has been working hard to keep the supply chain of essential good intact after a 21-day nationwide was lockdown announced by Prime Minister.
All regulators are also watching the situation closely and acting accordingly, to ensure financial soundness and smooth functioning of the stock exchanges.
Now all eyes are on the forthcoming economic package.
Nirmala Sitharaman today announced Prime Minister Gareeb Kalyan Scheme of Rs 1.70 lakh crore, which will take care of the poor. The Scheme will include cash transfers to the poor and migrants.
US Stimulus Package
Another reason that led the market rally was the $2 trillion coronavirus economic relief package announced by the US Senate members on Wednesday to counter the economic impact of COVID-19.
Now the voting on bill will take place in the House on Friday. Experts are hopeful that it will get passed.
Recovery in Rupee
The Indian rupee recovered sharply today after a rally in equity markets on likely stimulus from the government to fight the coronavirus pandemic.
Forex traders told PTI that the 21-day lockdown imposed by Prime Minister Narendra Modi showed that the government is willing to take hard steps to fight the Covid-19 pandemic.
The currency was trading at 75.22 against the US dollar, up 89 paise from previous close of 76.10 a dollar. It had weakened by more than 500 paise in last nearly two-and-half-month.
Lower Oil Price
The crude oil prices continued to trade below $30 a barrel amid steep fall in demand due to COVID-19 led lockdowns in major parts of the world.
The is positive for India.
International benchmark Brent crude futures traded at $26.89 a barrel, down 1.83 percent at the time of publishing this copy. It plunged over 60 percent from January highs.
India buys around 85 percent of its oil requirement from overseas.
The Nifty50 sustained above crucial 7,600 levels for the second consecutive session today and formed a bullish candle on daily charts.
Experts feel the rally was driven by short-covering and value buying.
They expect the rally to extend till 9,000 if the momentum sustains but advised not to take aggressive bets as the uncertainty with respect to coronavirus is still looming over.
"A phase of relief rally seems to be unfolding and once the index sustains above 8,300 zone expect a larger recovery towards 9,000 plus. Short-covering rallies a sharper at least in the first phase of recovery. Given the expected recovery, we have initiated positional buy on Nifty call option," Amit Shah, Technical Research Analyst with Indiabulls Securities told Moneycontrol.
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