₹5 Lakh Crore Wealth Surge! Sensex Jumps 398 Points; Nifty Reclaims 25,250 — 5 Big Reasons Behind Thursday’s Market Comeback

After three bruising sessions that wiped out investor confidence and triggered heavy selling across sectors, the Indian stock market staged a powerful rebound on Thursday — adding a massive ₹5 lakh crore in investor wealth in a single day.

The Sensex jumped 398 points, while the Nifty closed above 25,250, signalling that bulls are not ready to give up control despite global volatility.

Here are the five major forces that powered today’s sharp rebound.

1️⃣ Global Cues Turn Supportive — US & Asian Markets Stabilise

Overnight stability in the US markets, along with a rebound in Asia, helped soothe investor nerves.

US Treasury yields softened

Dollar index cooled

Risk appetite returned in global equities

Investors who were spooked earlier by geopolitical tensions and recession fears found fresh comfort in signs of global market recovery.

2️⃣ Heavy Short-Covering After 3-Day Selloff

Markets had witnessed intense selling over the last three sessions, pushing the Nifty nearly 400 points off its record highs.

Thursday’s gain was partly driven by:

Short-covering in key index heavyweights

F&O traders unwinding bearish positions

Fresh buying by domestic institutions after value emerged in several blue-chip stocks

Brokers say this short-covering rally could extend if global cues remain supportive.

3️⃣ Banking & IT Stocks Lead the Charge

Banking, IT and auto stocks — the sectors that saw heavy correction earlier — turned market leaders today.

Private banks rebounded smartly

IT stocks attracted fresh buying despite global uncertainties

Autos gained on strong December–January demand indicators

With these sectors holding major index weightage, even modest gains helped lift the broader market significantly.

4️⃣ FII Selling Slows; DIIs Step Up Their Buying

Another major shift: Foreign Institutional Investors (FIIs) reduced their selling pressure on Thursday.

Meanwhile, Domestic Institutional Investors (DIIs) — particularly mutual funds and insurance companies — stepped up aggressive buying.

This combined action helped balance out the selloff that had heavily pressured the market earlier in the week.

5️⃣ Optimism Builds Ahead of Interim Budget 2026

With the Interim Budget just days away, investors are pricing in:

Tax rationalisation hopes

Increased capex spending

Continued support for manufacturing, EVs, infrastructure

Rural revival measures

Analysts say hopes of a “market-friendly” budget are acting as a cushion against volatility.