The stock market bounced back on Wednesday. The Sensex, which tracks 30 of India's biggest companies, went up by 900 points to 85,338. The Nifty 50, which follows 50 major companies, rose 300 points to 26,180 by 1 pm. The increase came from positive news abroad, lower oil prices, hope that US interest rates might fall, and foreign capital inflows.
Why The Stock Market Might Be Rising Today
Hope Of Lower US Interest Rates
Recent economic data from the US suggested slower retail sales and weaker consumer confidence. This has increased expectations that the US Federal Reserve might reduce interest rates in December. Lower rates in the US usually encourage global investors to move money into emerging markets like India, boosting Indian stocks.
Foreign Investors Buying (FII Inflows)
Foreign institutional investors (FIIs) were net buyers of Indian shares, pumping money into the market. This inflow of funds adds demand for stocks and strengthens market sentiment, especially when valuations are attractive.
Strong Performance of Big Companies
Large companies that have a heavy weight on the indices, such as HDFC Bank, ICICI Bank, and Reliance Industries, saw their shares rise by around 1 per cent each. Gains in these heavyweight stocks pull the overall market higher, benefiting even smaller companies indirectly.
Falling Oil Prices
Oil prices eased slightly after news about possible progress in peace talks between Russia and Ukraine. Lower crude prices reduce costs for businesses and consumers, making the economy more stable. It also helps keep inflation under control, which investors see as a positive sign.
Global Market Optimism
Asian markets, including Japan and South Korea, rose strongly, following gains on Wall Street. Optimism over easing global tensions, prospects of peace in the Russia-Ukraine conflict, and expectations of a softer stance on trade by the US added to positive sentiment. When global markets do well, it often lifts Indian markets too.
Short Covering And Market Fundamentals
After a recent dip, some traders who had bet against the market (short sellers) bought back shares to close their positions. This “short covering” added to the upward momentum. Experts also note that Indian companies' fundamentals remain strong, with healthy corporate earnings expected in the coming months.
Expectations Of Domestic Rate Cuts
There are also hopes that the Reserve Bank of India (RBI) might lower interest rates in the near future. A domestic rate cut can increase liquidity in the system, encouraging more borrowing and investment, which supports stock prices
