After many months, the broad market indices BSE Sensex and Nifty 50 have turned positive for two consecutive days. Today, the indices have risen significantly, following the global markets and significant buying trends across the banking sector, along with other factors. Sensex gained over 900 points which pushed the index above the 75000 level, while Nifty 50 jumped over the 22750 level with a rise of 265 points. So, what are these factors that are driving the stock market rise? Let’s find out. 

1. Positive Global Market Sentiments: The sentiment of investors across the globe has been uplifted by positive shifts in the market. Whether it is the US market or the Asian markets, indices started flaring on Monday and ended in green which gave the required push to the Indian indices to move up. The Dow Jones Industrial Average rose 353.44 points yesterday to 41841.63 points while S&P 500 rose 0.64% to 5675.12 points, and the Nasdaq Composite gained 54.58 points. In the Asian Market, the Nikkei 225 gained 1.19%, while the Hang Seng Index gained 2.4%, showing significant positive sentiment across the markets. All these added to the rise of the Indian stock indices today.
2. Attractive Valuations: The correction that had been happening in the Indian stock market was primarily due to overvaluation. The stocks were overvalued before this prolonged correction, and now, the Indian equities are finally available at a great deal. The valuations of banking stocks have become the most attractive which is why this sector is witnessing massive buying and in turn, the Nifty Bank Index has gone up above 49000 level. 
3. Favorable Macroeconomic Factors: Inflation which has been one of the primary reasons for the markets’ sluggishness over the earlier months has finally been checked. In February, the retail inflation finally fell to 3.61%, even below the RBI’s 4% target. This has been a major push for the investors to turn positive. Along with the inflation going down, the IIP which indicates industrial growth has risen to 5.1% beating lower expectations. The GDP growth in the Q3FY25 stood at 6.2% which along with these factors helped the investors gain back confidence. Apart from these, the gross tax collection also increased by 16% which also added to the favorable macroeconomic factors. 
4. Rupee Gained Strength: After a prolonged period, the Rupee gained 10 paise and is currently at 86.71 against the US dollar. This has been a result of the positive market sentiment and most importantly, other Asian currencies gaining strength. Yesterday it gained 24 paise as well. 
5. Chinese Stimulus: Finally, we have the Chinese stimulus which shows that retail sales in the country have gone up drastically along with the growth in the fixed asset investments and this has uplifted the markets’ mood. The metal manufacturers’ stocks gaining traction with anticipation of a demand boost. This has also helped the Indian stock market today to gain investors’ confidence.

Wrapping up 

While the market has gained since yesterday and today, some significant buying has been witnessed, but that doesn’t rule out the chances of further corrections. Since the financial year is ending soon, usually stock market growth is witnessed during this time. So, to understand the market better, and its further movement, one needs to wait and make investment decisions wisely. 

Source: MoneyControl

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