Nifty 50, Sensex is higher.Why did the Indian stock market rise today? — 5 important reasons explained

India’s stock market benchmarks, the Nifty 50 and Sensex, rose sharply on Wednesday as the US Federal Reserve hinted at the possibility of three interest rate cuts this year. Trading closed on Thursday, March 21st.

The Nifty 50 and Sensex, the main indexes in the Indian stock market, started on a strong note, each rising more than 1% during the session.

The Sensex rose 540 points (0.75%) to close at 72,641.19 and the Nifty 50 rose 173 points (0.79%) to close at 22,011.95.

Only 10 stocks in the Nifty 50 pack were in the red.

Shares of NTPC (up 3.62%), BPCL (up 3.59%) and Power Grid (up 3.38%) closed as top gainers in the Nifty 50 index.

On the other hand, Bharti Airtel (down 0.71 per cent), HDFC Life Insurance Company (down 0.62 per cent) and Maruti Suzuki (down 0.36 per cent) ended as top losers in the Nifty 50 company pack.

Mid-cap and small-cap indexes outperformed their benchmarks. The BSE Midcap index rose around 2.36% and the Smallcap index rose 2.01%.

Also read: Contrarian view: 4 reasons why Anand Rati expects mid-cap and small-cap stocks to outperform next year

The overall market capitalization of BSE-listed companies reached almost 20 million yen INRalmost $380 million INRIn the last session, $374 million was added to investors, making them about 370 million yen richer. INR6 billion yen in one day.

Over 100 stocks including Bharti Airtel, Maruti Suzuki, Cummins India, CG Power D-Mart and Thermax hit 52-week highs in intraday trading on the BSE.

Experts highlighted the following five key factors driving today’s domestic stock market surge. Please look:

1. Fed signals about rate cuts

The US Federal Reserve (Fed) on Wednesday kept its benchmark interest rate unchanged at 5.25% to 5.50%, signaling the possibility of three rate cuts this year. The move appears to have boosted market sentiment, as investors were eager for clarity on the rate-cutting trajectory.

“Uncertainty about the Fed’s decisions has ended as the Fed held interest rates unchanged and refrained from hawkish messaging.The Fed chief said that while the labor market remains strong, inflation has eased significantly. , conveying confidence about a soft landing for the US economy and possibly three rate cuts this year,” said VK Vijayamar, chief investment strategist at Geojit Financial Services.Also read: Fed signals third rate cut this year; What impact will that have on stocks and gold?Experts give their opinions

2. Positive global cues

Positive global indicators also influenced domestic market sentiment. Major Asian indexes such as South Korea’s KOSPI and Japan’s Nikkei average rose 2% after the US Federal Reserve reaffirmed its intention to proceed with interest rate cuts.

3. Bulk purchase

Almost all sector indexes were bought on Thursday.

Nifty Bank rose over 1 per cent, while PSU banks and NSE metals sectoral indices rose over 2 per cent each.

Among the sectoral indexes, Nifty Realty rose 3%, followed by Nifty Metal (up 2.44%) and PSU Bank (up 2.14%).

The Nifty Bank index ended 0.81% higher.

Also read: Reliance stock price has risen 45% in the past year. Is it time to lock in profits?Here’s what the experts say

4. Growing power of domestic investors

Experts point out that the growing influence of domestic institutional investors (DII) has been a major driver of the domestic market’s resilience in recent times.

“The tug of war between FIIs and DIIs has been won by DIIs for some time now. This trend will continue if FIIs continue to sell, which could slow down their sales and turn them into buyers. It will be positive for large-cap stocks in banking, telecom, capital goods and automobiles,” said Mr. Vijayakumar.

Also read: BSE share price rises 8% after Investec upgrades stock to ‘buy’, sees 38% upside potential

5. Technical factors

Rupak De, senior technical analyst at LKP Securities, observed that the Nifty has rebounded following the Doji candlestick pattern on the daily chart, indicating a strong bullish reversal. The index has managed to regain its important 50-day simple moving average (SMA).

“Looking ahead, Nifty may widen its upside towards the 22,250-25,300 range. Moreover, a break above 22,300 could trigger an upward move towards 22,500 and above. Nifty above 21,840 “As long as the market maintains this level, we expect the bull market buying strategy to remain effective,” De said.

Jatin Gedia, Sharekhan technical research analyst at BNP Paribas, said the Nifty is repeating the decline from 22,526 to 21,710. The major retracement level is located between 22,118 and 22,214.

“The rally is likely to continue over the next few trading sessions. The intraday decline towards the support zone 21,950-21,930 should be used as a buying opportunity,” Guedia said.

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