Stock market today: The Indian stock market witnessed solid buying interest, with frontline equity indices, the Sensex and the Nifty 50, clocking strong gains in intraday deals on Wednesday, 24 June.
The Sensex jumped almost 1,000 points, or more than 1.3%, to an intraday high of 77,187, while the Nifty 50 rose to the day’s high of 24,090, jumping over 1%. The Nifty Midcap 100 and Smallcap 100 indices witnessed gains of about half a per cent.
The overall market capitalisation of firms listed on the BSE rose to over ₹477 lakh crore from ₹4,75 lakh crore in the previous session, making investors richer by ₹2 lakh crore in a day.
Why is the Indian stock market rising?
Let’s take a look at key factors behind the rise in the domestic market:
1. Short covering in select heavyweights
The rise in benchmarks can be attributed to short covering in select heavyweights, particularly in the banking and financial sectors.
Bank Nifty, Private Bank, IT, and Financial Services indices jumped almost 2% during the session.
Stocks such as ICICI Bank, HDFC Bank, Infosys, and SBI were among the top contributors to the benchmarks’ gains today.
IT stocks are rising on the back of a stronger dollar and expectations that Indian IT companies will further strengthen their AI capabilities.
Banking and financial stocks are rising as their credit growth has been strong and is expected to remain so in the coming quarters, making the sector attractive for medium-term bets.
2. Anti-AI trade could be at play
Some experts believe the domestic market is also benefiting from anti-AI trade. The sharp rise in AI stocks over the last year has raised concerns that the sector may be in a bubble or perhaps approaching a bubble territory. This is prompting investors to shift focus to other markets which offer opportunities beyond AI.
“This excessive volatility in semiconductor stocks and markets like South Korea and Taiwan is favourable to India, which is growing at a steady pace. The crash in Brent crude to below $77 has removed the macro headwinds for India. The rupee has stabilised. FII selling appears to have tapered off. This is positive for the market,” Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
3. Crude oil prices fall further
Crude oil benchmark Brent Crude is now near the $75 per barrel mark, offering a huge relief to major importers like India.
A decline in oil prices is a major positive for the Indian economy. As a result, the Indian trade deficit is expected to remain under control, inflation may not shoot up, and economic growth will not lose momentum.
Oil prices have crashed after the US and Iran made progress in their peace negotiations, and Iran loosened its grip on the Strait of Hormuz.
(This is a developing story. Please check back for fresh updates.)
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. 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.
