The Indian stock market saw healthy gains in morning deals on Tuesday, March 10, after two consecutive sessions of losses that dragged the Sensex and the Nifty 50 down 3% each. The market rebound followed U.S. President Donald Trump’s hint that the war in West Asia could be nearing an end.
The Sensex jumped more than 950 points to an intraday high of 78,526.25, while the Nifty 50 climbed more than 1% to the day’s high of 24,303.80.
However, the indices pared gains quickly. The Sensex was 507 points, or 0.65%, up at 78,073, while the Nifty 50 was 173 points, or 0.72%, up at 24,201 around 10:20 am.
Investors earned ₹4 lakh crore within minutes as the overall market capitalisation of BSE-listed firms rose to ₹445 lakh crore from ₹441 lakh crore in the previous session.
Why is the Indian stock market rising today?
Let’s take a look at five key factors that are likely driving the Indian stock market:
1. Hopes of an end to the US-Iran war
The US and Israel launched a combined attack on Iran on February 28. The conflict is into its second week, but markets seem to have started discounting the possibility of the war ending soon.
US President Donald Trump on Monday said the U.S.-Iran war may end soon as Tehran’s air force and navy had been seriously damaged.
According to news agency Reuters, Trump predicted that the “conflict may end well before the initial four-week time frame laid out by him earlier.”
2. Crude oil prices ease
Crude oil prices saw a sharp decline after Trump signalled that the end of the US-Iran war could not be borne. Trump also said he was considering removing sanctions related to oil and sending the US Navy to escort oil tankers through the Strait of Hormuz to help keep oil prices under control.
Meanwhile, according to reports, the G7 group of countries on Monday said the group is ready to take “necessary measures”, such as stockpile release, to support global energy supply.
Brent Crude traded nearly 6% lower at $99 per barrel mark around 9:15 am IST on Tuesday.
A decline in crude oil prices came as a major relief for Indian stock market investors, as the spike in crude prices seriously impacted the domestic macro conditions.
3. Rupee rebounds
A healthy rebound in the Indian rupee from record lows also influenced stock market sentiment. According to PTI, the domestic currency rose 23 paise to 91.98 against the US dollar in early trade on Tuesday.
According to Bloomberg data, the rupee lost 58 paise to settle at 92.33 after hitting an all-time low of 92.3575 against the US dollar on Monday amid concerns over the US-Iran war and a jump in crude oil prices.
4. Value buying in major sectors
Major indices, such as Nifty Bank, Financial Services, Auto, and Pharma, jumped more than 1% each in morning trade on Tuesday due to value buying in quality stocks from these segments after the recent correction.
“The correction in the market has made stock prices, particularly of large caps, fair. Sectors like financials, automobiles, pharmaceuticals and defence have good prospects,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
5. US dollar, bond yields decline
The dollar index declined by half a per cent, and the benchmark 10-year US bond yield eased to near 4% from 4.2% in the previous session, indicating that investors’ rush to safety had subsided and risk appetite had improved amid signs of easing geopolitical and geoeconomic risks.
Sensex, Nifty 50 today: Indices trade higher
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
About The Author
