Indian equities have recently experienced a remarkable surge, with key indices, BSE Sensex and Nifty50, gaining over 6% in just four trading sessions. This substantial uptick can be attributed to a confluence of factors that have reinvigorated investor confidence and market sentiments.

Over this period, the BSE benchmark Sensex recorded a remarkable increase of 4,706.05 points, translating to a 6.37% rise. Simultaneously, the NSE Nifty climbed by 1,452.5 points, or 6.48%. Collectively, these movements resulted in an impressive boost to investors' wealth, totaling Rs 25.77 lakh crore, which elevated the total market capitalization of listed companies on the BSE to around Rs 4,19,60,046.14 crore (approximately $4.90 trillion).

Key to this market revival has been the return of foreign portfolio investors (FPIs), who infused over $1 billion into Indian stocks over the last three trading days alone. This influx is notable considering the prolonged period of selling activity that had previously characterized the market. Vishnu Kant Upadhyay, Assistant Vice President of Research & Advisory at Master Capital Services, explained that this rally was significantly influenced by foreign fund inflows, a temporary pause on tariffs imposed by the United States, and a shift toward more accommodative monetary policy by the Reserve Bank of India (RBI).

On April 9, the RBI made headlines by cutting the repo rate by 25 basis points to 6%, marking the second consecutive rate cut of the year. The Monetary Policy Committee (MPC) unanimously decided to adopt a more accommodative stance moving forward, thereby signaling the possibility of further monetary easing in the future. This policy shift has been viewed favorably by market participants, further encouraging investment in equities.

Moreover, retail inflation in India fell to 3.34% in March, marking the lowest level in nearly six years. This decline, driven largely by lower prices of essential commodities such as vegetables, eggs, and other protein-rich items, has strengthened the case for additional rate cuts from the RBI, as inflation remains below the central bank's target of 4%.

In tandem with these domestic developments, international factors have also played a significant role in boosting market sentiment. The US government's recent announcement of a temporary suspension on tariff increases has alleviated fears of escalating trade tensions, thereby invigorating global stock markets. Investors interpreted this as a potential opening for future negotiations, which has generated a wave of optimism.

Additionally, the India Meteorological Department has predicted an above-normal southwest monsoon season, heightening expectations for robust agricultural output. Given that agriculture remains a critical sector in India's largely agrarian economy, this forecast adds to the positive outlook for both the economy and the stock market.

Ajit Mishra, Senior Vice President of Research at Religare Broking, noted that as the week advanced, market participants reacted favorably to various positive developments, including the anticipated normal monsoon and easing retail inflation. These factors have collectively raised hopes for potential policy rate cuts and have thus helped create a buoyant market atmosphere. Analysts will be closely watching upcoming corporate earnings reports and global trade updates to gauge market sentiment in the week ahead.