SENSEX surges over 500 points, NIFTY50 firm above 24,500; here are factors driving rally on Monday

The Indian equity benchmarks were trading higher on Monday, May 5, led by gains in index heavyweights like HDFC Bank, Adani Ports, ITC, Reliance Industries and Bharti Airtel. The 30-share SENSEX rose as much as 547 points and NIFTY50 index touched an intraday high of 24,526.40. The up move in the markets came on the back of strong cues from Asian markets. Japan's Nikkei rose 1%, Hong Kong's Hang Seng advanced 1.74% and Taiwan Weighted rose 1.74%.

Drop in crude oil prices

Crude oil prices fell in international and domestic markets fell sharply on Monday after the OPEC+ announced a hike in the output to 411,000 barrels per day from June.

WTI crude oil futures fell more than 3% to around $56.2 per barrel on Monday as OPEC+ agreed to ramp up production, fuelling fears about a global supply glut. OPEC+ will accelerate oil output hikes for a second consecutive month, raising output in June by 411,000 bpd.

Lower crude oil prices augur well for Indian economy as India imports most of its crude oil requirements.

Following the development, shares of oil marketing companies, paint manufacturers, and tyre companies rallied in the range of 2% to 3%. Crude oil prices have dropped nearly 30% in last year and 21% in 2025. The sharp fall in crude oil prices is margin accretive for many companies which use oil and its derivatives as key raw materials.

Continued foreign flows

Foreign institutional investors (FII) continue to buy shares in Indian markets adding to positive investor sentiment. FIIs bought shares worth ₹2,769.81 crore on Friday. FIIs turned net buyers in the Indian equity markets for the first time since start of this year in April, data from the National Securities Depository Limited (NSDL) showed. FIIs bought shares worth ₹4,223 crore in April after they sold stocks worth ₹1,16,574 crore in first three months of 2025.

One of the key reasons for FIIs turning net buyers is drop in the dollar index and subsequent rise in rupee against US dollar. Dollar index dropped below 100 after hitting high of 110 earlier this year.

Rising rupee

Strength in rupee against the US dollar is also adding to buying interest for Indian shares. The rupee gained 39 paise to 84.18 against the US dollar in early trade on Monday, as continued foreign investor interest in Indian assets lent fundamental support to the local unit.

Forex traders said a sharp decline in crude oil prices and a positive trend in domestic equities enthused investors further.

Sectoral picture

Most of the sector gauges compiled by the National Stock Exchange were trading higher led by the NIFTY Auto index's 1% gain after the auto companies reported their sales numbers for the month of April. NIFTY FMCG, Metal Oil & Gas, Healthcare and Financial Services shares were also witnessing buying interest.

On the flipside, NIFTY Bank was trading lower owing to weakness in State Bank of India and Kotak Mahindra Bank shares following their March quarter earnings.

Broader markets

Broader markets were outperforming their larger peers as NIFTY Midcap 100 index rose 1.26% and NIFTY Smallcap 100 index advanced 0.60%.

The overall market breadth was positive as 2,434 shares were advancing while 1,312 were declining on the BSE.

NIFTY50 gainers and losers

Adani Ports was top gainer in the NIFTY50 index, the stock rose 7.36% to ₹1,360.30 after a Bloomberg reported suggested that Gautam Adani's team is meeting Trump's administration to seek dismissal of criminal charges in a bribery probe.

Adani Enterprises (6.59%), Trent (3.87%), Shriram Finance (3.09%) and Bajaj Finserv (2.44%) were also among the gainers.

On the flipside, Kotak Mahindra Bank was top NIFTY50 loser, the stock fell over 6% to hit an intraday low of ₹2,058 after its January-March quarter earnings failed to enthuse investors. On the National Stock Exchange, Kotak Mahindra Bank shares fell as much as 5.25% to hit an intraday low of ₹2,070.30.

The Mumbai-based lender reported a net profit of ₹3,551.74 crore in January-March quarter on Saturday, May 3, marking a decline of 14% from ₹4,133.30 crore in the same period last year. The decline in profit came on the back of sharply higher provisions for bad loans.

ONGC (-2.06%), Dr Reddy's Labs (-1.45%), State Bank of India (-1.29%) and JSW Steel (-0.99%) were among the laggards.