Indian markets kicked off the week with a historic surge on Monday, May 26, 2025, as the Nifty50 closed above the 25,000 mark for the first time ever, settling at 25,001.15. The Sensex wasn’t far behind, ending the session 455 points higher at 82,176.45. More than just numbers, this rally reflected a mix of strong domestic cues and favorable global signals.
What Sparked This Rally?
RBI’s ₹2.69 Lakh Crore Dividend – A Fiscal Game-Changer
The Reserve Bank of India announced a record dividend payout to the central government, instantly lifting sentiment. This move is expected to ease fiscal pressure and potentially support more public capex ahead of Budget 2025.
Global Relief: Tariff Delays and Dollar Decline
U.S. President Trump’s decision to delay tariffs on EU imports until July calmed global markets. Simultaneously, the weakening U.S. dollar made emerging market assets like Indian equities more attractive to foreign investors.
Sectoral Participation Indicates Broad Optimism
Auto and IT stocks led the gains — often seen as a bullish sign for medium-term sentiment. Nifty Auto rose over 1%, with Bajaj Auto and M&M hitting new highs. IT saw strength in HCL Tech and Tech Mahindra, hinting at possible earnings momentum in the next quarter.
Top Gainers & Losers – What They Reveal
Among the Nifty50, stocks like JSW Steel, Hindalco, and Bajaj Auto stood out with gains above 2%. On the flip side, Eternal Ltd. was the biggest loser, sliding nearly 5% amid concerns about passive outflows due to changes in global index composition.
These movements suggest a shift in investor focus toward capital goods, autos, and metals — sectors likely to benefit from domestic capex and China+1 tailwinds.
Midcap & Smallcap: Healthy Signs of Retail Participation
Both the Nifty Midcap 100 and Smallcap 100 posted gains of 0.67% and 0.37%, respectively. Though not as explosive, the consistency in broader market strength suggests that this rally isn’t just FII-driven — retail and DII flows are actively supporting the uptrend.
Technical View – Is There More Steam Left?
According to chartists, the next resistance for Nifty lies near 25,150. If this is breached on strong volumes, we could see a short-term rally toward 25,300–25,400. For Sensex, 82,500 is the next level to watch. Traders should stay alert near these zones as some profit-booking could emerge.
Investor Takeaway: What Should You Do Now?
If you’ve missed the rally so far, don’t chase blindly. Consider stocks and sectors that are still consolidating despite strong fundamentals — like FMCG and select PSU banks. Also, keep an eye on policy announcements linked to RBI’s dividend, as they could define new winners heading into June.
