After the start of the Iran-Israel war, the stock market was continuously diving. But this record has changed slightly in the last 3 trading days. Sensex and Nifty came in the green. Even on Wednesday, the market remained in the green, due to which investors earned approximately Rs 6 lakh crore. With this rise, the total market capitalization of BSE listed companies increased by about Rs 6 lakh crore, taking it to more than Rs 439 lakh crore.
Shares like Infosys, HCL Technologies, TCS and Tech Mahindra were among the top Sensex gainers, gaining around 3% each. Zomato’s parent company Eternal, Mahindra & Mahindra (M&M), Trent, Adani Ports, IndiGo and others also gained up to 2%. However, the biggest decline was recorded in HDFC Bank, ICICI Bank, Tata Steel and Bajaj Finance.
Rally in IT shares
Due to the tremendous rally in IT stocks, Nifty IT was the biggest gainer sectoral index on NSE, rising by more than 3%. It was followed by Nifty Media, Nifty Auto and other indices. A total of 2,351 shares gained on the exchange, while 494 shares declined and there was no change in 71 shares.
Why is the stock market running away?
- Reduction in oil prices- A fall in oil prices was seen on Wednesday morning. Earlier, there had been a tremendous rise in oil prices, the main reason for which was the closure of the Strait of Hormuz for a long time. Actually, Iran had attacked the ships trying to pass through this important waterway, due to which this route was closed. Brent crude fell more than 1% to $102 per barrel, while WTI crude fell nearly 2% to $94.53 per barrel. Despite this decline, oil prices still remain above the important level of $ 100 per barrel. The reason for today’s fall in oil prices is that an agreement has been reached between the Iraqi government and Kurdish authorities to resume oil exports through Turkey’s Ceyhan port. This agreement has provided relief to some extent from the concerns regarding the supply of oil from the Middle East.
- Boom in global market- Wall Street closed with gains on Tuesday. It came as the US Federal Reserve began its two-day policy meeting as investors remained concerned about higher oil prices and the ongoing conflict in the Middle East. The S&P 500 rose 0.25% to 6,716.09. The tech-heavy Nasdaq rose 0.47% to 22,479.53, while the Dow Jones Industrial Average gained 0.10%. Asian markets were mostly in the green on Wednesday morning. Japan’s Nikkei jumped more than 2%, while South Korea’s Kospi rose nearly 4%. However, Hong Kong’s Hang Seng closed with a slight decline. Meanwhile in Europe, France’s CAC rose 0.5%, Germany’s DAX rose more than 0.7% and the UK’s FTSE closed 0.8% higher yesterday.
- Decline in bond yield- US bond yields on five- to 30-year government bonds (Treasuries) fell for the second consecutive session, while the two-year yield fell for the third consecutive day. The benchmark 10-year yield fell 2.2 basis points (smaller measure) to 4.198%. The US two-year yield, which reflects expectations about interest rates, also declined, slipping 1.1 basis points to 3.669%. Yields have fallen by about 10 basis points in the last three days, which is the biggest three-day fall since late November. The special thing is that the markets are eagerly waiting for the comments of the US Federal Reserve. The Federal Reserve will announce the decisions taken during its FOMC meeting later today.
- Value buying- This round of ongoing buying in Indian markets has come after heavy selling in the first two weeks of March. During that time, the increasing tension between Iran and US-Israel had shaken the markets. At that time, there was a huge fall of up to 10% in Sensex and Nifty, due to which a large part of the investors’ capital was lost.