Indian equities market recorded healthy gains in the morning session of Tuesday, June 24, with the Sensex surging more than 900 points and Nifty 50 regaining 25,250 in early trades.
Sensex started the day at 82,534.61 compared to its last close of 81,896.79 and jumped more than 900 points, or by over a per cent, to an intraday high of 82,835.39. Nifty 50, however, opened at 25,179.90 compared to its last close of 24,971.90 and rose more than 1 per cent to an intraday high of 25,250.85.
The home market saw widespread buying, with the BSE Midcap and Smallcap indexes also rising by more than a per cent.
The total market capitalisation of BSE-listed companies surged to almost ₹452 lakh crore from ₹448 lakh crore in the last session, enriching investors by around ₹4 lakh crore in the first 5 minutes of the session.
Also read: US-Iran conflict hits basmati exports
At around 9:20 AM, the Sensex was up by 916 points, or 1.12 per cent, at 82,813, and the Nifty 50 was up by 265 points, or 1.06 per cent, at 25,237.
Why is the Indian stock market up today?
Experts point out the following five main reasons for the sudden buying in the Indian stock market:
1. Trump declares Israel-Iran ceasefire
US President Donald Trump revealed on Monday that Israel and Iran had come to a full ceasefire agreement.
"On the hope that all works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to put an end, what should be termed, 'THE 12 DAY WAR', Trump posted on his Truth Social platform.
Trump's statement improved sentiment worldwide, and investors speculated on buying equities at cheaper rates following the recent decline.
2. Oil prices plummet
Crude oil fell sharply following the Israel-Iran ceasefire, which eased the burden of Indian stock market investors.
Brent Crude plummeted almost 3 per cent to trade below the $70 a barrel level after oscillating around the $80 a barrel level in the previous session.
Analysts had cautioned that high crude oil prices over an extended period would be detrimental to the Indian economy and stock market. Thus, a collapse in crude oil prices has improved sentiment in domestic markets.
3. Investors offload safe-haven assets, scramble to equities
Relaxation of tensions in the Middle East has taken one of the biggest headwinds off the market, and this is tempting investors to shed safe-haven plays such as gold and the dollar for riskier stocks, which are now cheaper following the recent decline.
MCX Gold fell more than a per cent in morning trade, while the dollar index lost around half a per cent.
4. Rupee jumps
In early Tuesday morning trade, the rupee appreciated 65 paise to 86.13 against the US currency following a collapse in crude oil prices.
Appreciation of the rupee against the US currency enhanced market mood since a higher domestic currency can draw foreign capital and ease inflationary pressure.
Also read: Sensex drops 500 points as Middle East conflict intensifies
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