The Indian stock market experienced a significant surge on October 23, with the Sensex rising nearly 800 points and the Nifty climbing over 200 points, crossing the 26,000 mark. This rally follows the Diwali break and reflects growing investor optimism. The Nifty Bank index also joined the upward trend, increasing by 0.76% in early trading.

Several factors contributed to this market boost. Firstly, optimism surrounding India-US trade talks has heightened. Reports suggest that both nations are close to finalising a trade agreement, which may involve reducing US tariffs on Indian exports from 50% to approximately 15-16%. This potential deal is expected to focus on energy and agriculture, with India possibly reducing crude oil imports from Russia.

Corporate earnings expectations have also improved due to record sales during the recent festive season. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted, "Unprecedented record sales during the last few days have the potential to improve corporate earnings. FIIs turning buyers recently and short covering are factors that can fuel the rally. Clearly, it is advantage bulls!" He highlighted that textile stocks, which faced challenges from high tariffs, are likely to see increased buying.

The IT sector is leading the charge in this rally, with Infosys rising over 3% after announcing a substantial Rs 18,000 crore share buyback. Other IT companies like HCL Tech and Tech Mahindra are also performing well. Additionally, banking stocks such as Axis Bank and Kotak Mahindra Bank are contributing positively to market momentum.

A broad-based rally is evident across all sectors, with the Nifty IT index up more than 2%, FMCG stocks rising by 1%, and auto, metals, and media sectors also showing gains. Furthermore, gold and silver prices have stabilised after recent corrections, reflecting a shift towards risk assets amid the optimism surrounding US-India trade relations.

As the market continues to gain momentum, analysts are closely monitoring whether this festive rally can be sustained. While the sentiment remains positive, experts caution that any unexpected global developments or delays in trade negotiations could lead to short-term volatility. Overall, the current market conditions suggest a strong potential for further gains in the coming sessions, with many participants hopeful for record highs before the year ends.