On June 21, 2025, the Indian stock market witnessed a robust rally, with the BSE Sensex surging 1,046 points to close at 82,408.17 and the NSE Nifty climbing 319 points to settle at 25,112.40. This marked a strong rebound after a three-day losing streak, boosting investor wealth by ₹8.22 lakh crore. Here are the four key drivers behind today’s market rally, crafted to be SEO-friendly, copyright-free, and written in a human-like tone.
1. RBI’s Eased Provisioning Norms for Project Financing
The Reserve Bank of India (RBI) played a pivotal role in fueling the rally by relaxing provisioning norms for project financing. This move alleviated pressure on financial institutions, boosting confidence in the banking and financial services sectors. Stocks like ICICI Bank, Axis Bank, and SBI saw significant gains, with the Nifty Bank index jumping over 1%. The policy change signaled a supportive environment for infrastructure and project-based lending, encouraging investor optimism and driving sectoral gains.
2. Strong Sectoral Performance in Financials, Auto, and Metals
The rally was broad-based, with key sectors like Financial Services, Auto, and Metals leading the charge. The Nifty Financial Services index rose sharply, driven by heavyweights like HDFC Bank. The Auto sector benefited from positive demand outlooks, while the Metal sector gained from global commodity price stability. In the broader market, the Nifty Midcap and Smallcap indices rebounded by 1.5% and 1%, respectively, reflecting widespread buying interest. This sectoral strength underscored the market’s resilience and attracted both domestic and foreign investors.
3. Positive Global Cues and a Weaker US Dollar
Global markets provided a supportive backdrop, with the US Federal Reserve maintaining its projection of two rate cuts in 2025 despite higher inflation expectations. This signaled a potential easing of monetary policy, boosting global equity sentiment. Additionally, the US dollar index dropped to 98.57, enhancing the appeal of emerging markets like India. A weaker dollar supported the Indian rupee and attracted foreign institutional investors (FIIs), who turned net buyers, purchasing equities worth ₹1,824 crore over the last two sessions. These global tailwinds significantly contributed to the rally.
4. Reduced Geopolitical Tensions and Technical Rebound
Easing concerns over geopolitical tensions in the Middle East, particularly after the US postponed decisions on military action against Iran, provided relief to markets. This reduced fears of oil price spikes, with Brent crude slipping 2.27% to $77.06 per ounce. Additionally, technical indicators suggested the market was oversold after recent declines, making a rebound likely. The Nifty reclaimed the 21-day EMA, with analysts like Rupak De from LKP Securities noting support at 24,850 and potential for further gains toward 25,350. This combination of reduced risks and technical strength fueled the bullish momentum.
Conclusion
The Sensex’s 1,046-point surge on June 21, 2025, was driven by a mix of domestic policy support, strong sectoral performance, favorable global cues, and easing geopolitical risks. The rally not only restored investor confidence but also highlighted the Indian market’s resilience amid global uncertainties. As the Nifty reclaims the 25,000 mark, investors remain cautiously optimistic, with analysts suggesting a “buy on dips” strategy for the near term.
Sources: The Economic Times, Business Today* [](https://economictimes.indiatimes.com/markets/stocks/news/why-is-the-stock-market-rising-today-sensex-gains-800-pts-nifty-tops-25000-4-key-drivers-of-the-rally/articleshow/121968246.cms?from=mdr)[](https://www.businesstoday.in/amp/markets/stocks/story/sensex-rises-1046-pts-nifty-reclaims-25k-mark-after-six-days-market-outlook-481224-2025-06-20)
