The Indian stock market benchmarks- the Sensex and the Nifty 50- extended gains for the second consecutive session on Wednesday, March 25, a day after clocking strong gains of nearly 2% each.
The Sensex jumped over 700 points, or more than 1%, to 74,841, while the Nifty 50 rose by 250 points, or 1%, to 23,158.
Investors’ wealth rose by ₹6 lakh crore within minutes as the overall market capitalisation of companies listed on the BSE rose to ₹429 lakh crore from about ₹423 lakh crore in the previous session.
Why is the stock market rising today?
Let’s take a look at five key factors behind the rally in the stock market:
1. Indication of the Middle East conflict likely to end soon
Reports of positive developments between the US and Iran are cheering the market.
US President Donald Trump claimed Washington DC and Tehran have “major points of agreement” and ordered a five-day suspension of US strikes on Iranian energy infrastructure, raising hopes of a diplomatic breakthrough.
2. Positive global cues underpin sentiment
Positive global cues boosted the overall market sentiment. Almost all major Asian markets were in the green in early trade. Japan’s Nikkei and Korea’s Kospi jumped up to 3%, while China’s Shanghai Composite index climbed by 1% amid reports of peace talks between the US and Iran.
3. Crude oil prices fall below $100
Brent Crude prices crashed by more than 5% to fall below the $100-per-barrel mark following reports of the US diplomatic push to resolve the Middle East conflict.
Brent Oil Futures June contracts dipped to $93.45 amid easing geopolitical risks.
India is the world’s third-biggest oil importer and consumer, and it meets about 80- 90% of its crude oil requirements through imports.
Elevated crude oil prices increase the risk of India’s inflated import bill, widen its current account deficit, pressure its fiscal deficit targets, weaken the currency, raise inflation, and trigger foreign capital outflows.
(This is a developing story. Please check back for fresh updates.)
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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.
