On Tuesday, March 10, a tremendous rise was seen in the Indian stock market. After two consecutive sessions of decline, both Sensex and Nifty 50 fell 3%. The market gained momentum after US President Donald Trump signaled an end to the war in West Asia. The Sensex closed 640 points or 0.82% higher at 78,205.98, while the Nifty 50 closed 234 points or 0.97% higher at 24,261.60.
The mid- and small-cap segments performed well. The BSE 150 Midcap index rose 1.66%, while the BSE 250 Smallcap index rose 2.04%. Investors made gains of ₹6.50 lakh crore in a single session as the total market capitalization of BSE-listed companies rose to about ₹447 lakh crore from ₹441 lakh crore in the previous session. Let us also tell you what are the 5 reasons due to which the stock market has increased.
Hope for end of US-Iran war
US and Israel together attacked Iran on 28 February. It’s the second week of fighting, but it seems the markets have started to play down expectations of a quick end to the war. US President Donald Trump said on Monday that the US-Iran war could end soon as Tehran’s air force and navy have suffered heavy losses. According to news agency Reuters, Trump had estimated that the war could end much earlier than his initial four-week timeframe.
Fall in crude oil prices
Crude oil prices fell sharply after Trump said the US-Iran war could end soon. Trump also said he was considering sending the US Navy to escort oil tankers through the Strait of Hormuz to help lift the oil embargo and control oil prices. Meanwhile, according to reports, the G7 countries group on Monday said it is ready to take “necessary steps” such as stockpile release to support global energy supply. Brent crude was down nearly 9% to trade at $90 a barrel around 3:30 PM IST on Tuesday. The fall in crude oil prices was a big relief for investors in the Indian stock market, as the surge in crude oil prices had adversely affected domestic macro conditions.
Rupee in Rupee
The big comeback of the Indian Rupee from its record low also impacted the stock market sentiment. According to Bloomberg data, the Indian rupee rose 53 paise to close at 91.8050 per dollar on Tuesday. The rupee fell 58 paise to close at 92.33 against the US dollar on Monday after hitting an all-time low of 92.3575 amid concerns of the US-Iran war and rising crude oil prices.
Value buying in big sectors
Major indices like Nifty Bank, Financial Services, Auto and Pharma rose on Tuesday due to value buying in quality stocks in these segments following the recent correction. Nifty Auto jumped more than 3 per cent, while the PSU Bank index rose more than 2 per cent. Nifty Bank and Financial Services rose about 2 percent. Pharma pack increased by 1.4 percent. Nifty IT (down 0.46%) was the only major sectoral index on NSE to close in the red. “Correction in the market has led to recovery in stock prices, especially in large-caps. There are good prospects in sectors like financials, automobile, pharmaceuticals and defence,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
US dollar, bond yields fall
The dollar index fell more than half a percent, and the benchmark 10-year US bond yield fell to about 4 percent from 4.2 percent in the previous session, suggesting investors’ appetite for safety has diminished and risk appetite has improved amid signs of easing geopolitical and geoeconomic risks.