Dalal Street has seen a strong rally over the last few sessions, and the trend continued on Wednesday, with both the Sensex and Nifty rising sharply in early trade.
After a nearly 12-to-15% correction earlier this year, the Sensex added over 500 points and crossed the 80,000 mark again. In early July 2024, the Sensex crossed 80,000 for the first time.
At 9:48 a.m., the S&P BSE Sensex was up 580.19 points at 80,175.78, and the NSE Nifty50 was up 169.50 points to 24,336.75.
WHY ARE MARKETS RISING NOW?
This sharp market movement was driven by gains in IT stocks, strong buying by foreign investors, and positive global signals, particularly from the United States.
Easing US-China trade relations
The Sensex and Nifty surged after US President Donald Trump stated that tariffs on Chinese imports could be reduced sharply following a deal, but not completely removed.
His comments boosted global markets, easing concerns about US-China trade tensions. Investors are hopeful that the situation will improve further, potentially boosting international trade and business growth.
FIIs Return to Dalal Street
Another reason for the rally is consistent buying by foreign portfolio investors. They returned to the Indian market in recent sessions after a period of absence. A weaker US dollar, higher stock valuations following the recent drop, and India's stable economy have drew them back. This new inflow of foreign funds has helped the Indian market gain strength.
IT STOCKS SURGE
Technology stocks were a major factor in the market's increase. The BSE Sensex's top performer, HCL Technologies, increased 7.12%. Tech Mahindra, which increased 4.36%, came next. Tata Consultancy Services expanded by 2.30%, Mahindra & Mahindra by 2.82%, and Infosys by 3.32%.
Gains in the US technology sector were reflected in the robust rally in Indian IT stocks. The previous session saw over 3,500 stocks rise on the Nasdaq, with tech giants like Amazon and Nvidia seeing 3% increases in after-hours trading. Apple saw a 2% increase as well.
A few stocks were under pressure, but the majority saw increases. Hindustan Unilever dropped 0.06%, HDFC Bank 0.16%, ITC 0.08%, Bajaj Finance 0.47%, and Kotak Mahindra Bank 0.42%.
Recent terrorist attacks and political unrest in nearby nations are not expected to affect the Indian economy or stock market, according to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He claimed that Trump's remarks regarding trade between the US and China and his backing of the US Federal Reserve Chairman had a calming effect on world markets. Vijayakumar went on to say that the market is receiving strong support from foreign investor purchases, but he issued a warning that the market might soon reach overbought territory, which could result in some profit booking. He counseled investors to keep their attention on large-cap, high-quality stocks.
