On Thursday, Indian markets celebrated a significant milestone as the Nifty 50 index surged to a fresh all-time high, signaling renewed optimism among investors after more than a year of relatively subdued market performance. The benchmark index touched 26,285.95 points, gaining 80.65 points (0.31%), surpassing its previous peak of 26,277.37 set in September 2024. Similarly, the Sensex rallied sharply to 85,843.82, inching closer to its September 2024 record of 85,978.25. Both indices opened higher on Thursday, extending the gains recorded in Wednesday’s session, reflecting a broader bullish sentiment across the market.

Earnings Outlook and Stable Valuations Bolster Confidence

Market experts attribute the rally to a combination of improving corporate earnings expectations, supportive macroeconomic policies, and relatively attractive valuations. Ajay Bagga, a banking and market expert, told ANI that Indian markets are now “well-positioned to reclaim the all-time highs hit in September 2024.” He added that a sustained move above this level could trigger a rapid catch-up phase, as historically, long periods of consolidation often precede strong returns over the following 12 months.

Corporate earnings, which have shown a strong revival over the past year, are expected to improve further in the second half of FY26. Analysts highlight factors such as benign inflation, recovering domestic consumption, and supportive fiscal and monetary policies as key drivers for this earnings uptick. At the same time, valuations have become more appealing; Nifty now trades at 22.3x–22.7x forward earnings, down from 23x–25x levels a year ago, offering a comparatively stable entry point for investors.

Technical Indicators Signal Bullish Momentum

Technical charts also point towards continued upward momentum. Ponmudi R, CEO of Enrich Money, noted that the Nifty has consistently formed higher-low patterns, confirming that the broader trend remains bullish despite occasional profit-booking at higher levels. According to him, a sustained close above 26,277 could propel the index toward 26,350–26,500, with a potential extension to 27,000 in the medium term. Immediate support for the index lies in the 26,100–26,000 range, with a stronger cushion near 25,850.

Global Cues Provide Support

Global markets have also contributed to positive sentiment. Asian indices opened higher on Thursday, with Japan’s Nikkei 225 gaining over 1%, while Taiwan, Singapore, and South Korea recorded early gains. Optimism about potential US Federal Reserve rate cuts outweighed concerns over a recent sell-off in AI stocks, further lifting investor sentiment. US markets continued their uptrend overnight, providing additional support to domestic indices.

Domestic Flows Offset Foreign Volatility

Analysts emphasize that strong domestic institutional participation has been a stabilizing factor for the markets. Mutual fund inflows, particularly through Systematic Investment Plans (SIPs), have reached record levels, providing a steady source of capital and helping offset volatility from foreign portfolio flows. The relatively lower valuation premiums of Indian markets compared to Asian peers, combined with India’s minimal exposure to AI-heavy sectors, have made it an attractive destination for global investors seeking steady growth opportunities.

Sectoral Drivers and Investor Sentiment

The rally was broad-based, with banking, IT, and consumer goods sectors leading the gains. Optimism around corporate earnings revival, coupled with sustained domestic consumption trends and lower borrowing costs, has reinforced investor confidence. Analysts point out that the market’s resilience, even amid global uncertainties, reflects the strength of India’s domestic economic fundamentals and investor faith in its long-term growth story.

Outlook

Overall, the Nifty’s fresh all-time high reflects a convergence of positive factors: improving corporate earnings, attractive valuations, supportive domestic flows, and favorable global cues. Technical charts suggest that the index could continue to test higher levels in the near term, while domestic investor participation provides a strong buffer against external shocks. As India’s market reclaims its 14-month high, market watchers remain optimistic that the rally could continue into the closing months of 2025, potentially opening the path toward new benchmarks in 2026.