Stock market: The Indian stock markets finally returned on Thursday 13 February after a steady decline of 6 days. Amidst strong global signals, the Sensex today rose 450 points to 6,621 in early trade today. The Nifty was also trading at 23,185 with a gain of 139 points. Even small and medium shares saw a great jump. BSE’s midcap index was trading by growing at 1.18 per cent and smallcap index by 0.78 per cent. Most of the sectoral index were also in green mark today. The most fastest was seen in Nifty Pharma. The Nifty metal was also included in the top gainers of 1.5 per cent gains.
Market experts say that There were 6 major reasons behind this strength in the stock market-
1. Russia-Ukraine boom in global market due to expectations of peace talks
The improving investors at the global level saw an improvement in the senses at the global level after reports of possible negotiations between the US and Russia. US President Donald Trump and Russian President Vladimir Putin agreed to start peace talks by talking on phone, which reduced concern about long-standing geopolitical instability.
After this news, global stock markets saw a surge. S&P 500 futures went up 0.2%, NASDAQ futures 0.4% and European stocks up 1%. Japan’s Nikkei rose 1.1%, while Hong Kong’s Hang Seng index jumped 1% to a four -month high. This boom has suppressed the concerns related to the increase in US inflation and treasury yields.
2. The market digested the US inflation shock
The US Consumer Price Index (CPI) rose 0.5% in January, which was the biggest jump after August 2023. Its annual CPI has reached 3.0%, which was more than an estimate of 2.9%. After this figure, the Treasury Yield booured and the yield of the 10-air trades broke overnight to 4.66 percent and then later it came down to 4.615 percent. However, analysts say the market had already accepted the possibility of not cutting interest rates towards the US Federal Reserve, so this data did not affect the equity market much.
3. Retail inflation declined in India, expectation of rate cut from RBI increased
India’s Consumer Price Index (CPI) has been 4.31% in January, which is a low of the last five months. This is less than an estimate of 4.6 percent of economists and is far below the inflation rate of 5.22 percent in December. Due to the decline in food inflation, expectations have been strengthened that the Reserve Bank of India (RBI) may make another cut in interest rates during the month of April. HDFC Bank Chief Economist Sakshi Gupta said, “Inflation may remain between 4-4.5% in the next two months, which increases RBI’s chances of cutting rates in April.”
4. Relief in fall in price of crude oil
Crude oil prices continue to fall. On Thursday, the price of Brent crude came to $ 74.66 per barrel and the price of US crude to $ 70.88 per barrel, which has reduced inflation concerns. After reports related to Russia-US talks, the market hopes that geopolitical tension will decrease and global supply will be better. For big buyers of crude oil like India, the fall in crude oil prices is relieving as it will reduce the pressure on inflation and fiscal deficit.
5. Support Asian markets stability in China markets
The recovery in China’s stock markets supported Asian stock markets on Thursday. Hong Kong’s Hang Seng index rose 1% to a four-month high, while China’s blue-chip stocks remained stable. This indicates that investors now see opportunity in Asian markets, especially in Tech and Consumer sector.
6. Lower -level shopping in largecap stocks
The Sensex and Nifty saw a strong decline of 3% of the last 6 days. This gave investors the opportunity to purchase at the lower level in many beaten large-cap stocks. The market has also got support from continuous investment from mutual funds. VK Vijaykumar, the chief investment strategist of Geojit Financial Services, said, “The current weakness is an opportunity, so that investors can get out of expensive small and midcap stocks and can shift to fair price large -price large stocks.”
Also read- HAL Share Price: This government defense shares can climb 50% from the current level, 15 out of 16 experts gave BUY rating
Disclaimer: The ideas and investment advice given by experts/brokerage firms on Moneycontrol are their own, not the website and its management. Moneycontrol advises users to consult a certified expert before making any investment decision.