Indian stock markets experienced a significant surge on Thursday, May 15, 2025, with both the Sensex and Nifty indices posting substantial gains. The rally was fueled by optimism surrounding a potential trade deal between the United States and India, coupled with positive global cues and encouraging domestic economic factors.

The BSE Sensex closed at 82,530.74, up by 1,200.18 points or 1.48 percent. The NSE Nifty 50 settled above the 25,000 mark at 25,062.10, gaining 395.20 points or 1.6 percent. This surge marked a multi-month high for both indices. The positive momentum extended to broader markets, with the Nifty Midcap100 and Nifty Smallcap100 indices also closing with gains.

Several factors contributed to this market upswing. Comments from U.S. President Donald Trump stating that India had offered a trade deal with "basically zero tariffs" on a wide range of American goods significantly boosted investor sentiment. This announcement suggested a potential easing of trade tensions between the two countries, which has been a key concern for markets.

However, External Affairs Minister S. Jaishankar cautioned against jumping to conclusions, clarifying that trade negotiations were still in progress and no final agreement had been reached. He emphasized that any trade deal must be mutually beneficial to both countries. Despite this, Trump's initial statement injected a wave of optimism into the market.

Falling crude oil and gold prices further supported the rally. A decline in oil prices generally benefits the Indian economy, as it reduces import costs and inflationary pressures. Similarly, a drop in gold prices indicates a reduced need for safe-haven investments, encouraging investors to shift towards equities.

Strong foreign institutional investor (FII) inflows also played a crucial role. Since April 15, FIIs have invested approximately Rs 50,000 crore in Indian equities, marking positive net inflows in 19 out of 20 recent trading sessions. This surge in investment indicates growing confidence in the Indian market.

Cooling inflation added to the positive sentiment. Retail inflation in India eased to a six-year low of 3.16 percent in April, raising hopes of further rate cuts by the Reserve Bank of India (RBI). Lower inflation and potential rate cuts can stimulate economic growth and boost market momentum.

From a sectoral perspective, Nifty Financials, Auto, IT, and Metal indices saw significant gains. Top gainers in the Nifty 50 index included Hero MotoCorp, JSW Steel, and Tata Motors. The market capitalization of BSE-listed firms increased by approximately ₹5 lakh crore, reaching ₹440 lakh crore, signifying substantial wealth creation for investors.

While the market is currently experiencing strong momentum, analysts suggest that it may enter a phase of consolidation in the near term as investors await concrete signs of earnings growth. Despite this, the overall outlook remains positive, with a "buy on dips" strategy recommended.

The US500 stock market index has increased 0.62% since the beginning of 2025.