Financial year 2027 has started and tremendous momentum has been seen in the stock market on the very first day of the year. Whereas in the last financial year, stock market investors got negative returns. If we talk about today i.e. the first day, the Indian stock market broke the trend of two consecutive days of decline and Sensex and Nifty 50, reflecting the global trends, closed with strong gains.
The Sensex closed 1,187 points, or 1.65%, higher at 73,134.32, while the NSE Nifty 50 gained 348 points, or 1.56%, and settled at 22,679.40. A rise of up to 3% was seen in the mid and small-cap indices on BSE. Among sectoral indices, Nifty PSU Bank and Media indices gained 3.7% each. Metal, IT and Auto indices gained 2% each.
Nifty Bank index rose by 2.33%. Investors earned Rs 10 lakh crore in a single session. In fact, the total market capitalization of companies listed on BSE increased from Rs 412 lakh crore in the previous session to Rs 422 lakh crore. Let us also tell you what were the reasons for the decline in the stock market.
US-Iran war nears its end
Markets are encouraged by emerging signs of a possible end to the ongoing conflict in West Asia. According to reports, US President Donald Trump has said that Washington can end its military attacks on Iran within two to three weeks. The US President said that Tehran does not need to fulfill the conditions of any deal to end the war. The US-Iran war, which began on February 28, has pushed crude oil prices to their highest levels in several years. This has increased concerns about its impact on global growth and inflation, and has also dealt a blow to market sentiment.
VK Vijayakumar, chief investment strategist at Geojit Investments, said that statements issued by Iranian officials are indicating easing of tensions in the war. The Iranian President’s readiness to end the war and the Iranian Foreign Minister’s confirmation that ‘messages have been exchanged with the US’ indicate that the war may end soon. The markets may start factoring this into their valuations even before the war de-escalates.
Positive Global Sentiments
The positive sentiment of the global stock market also affected the sentiment of the domestic market. In Asian markets, Korea’s Kospi rose nearly 8 percent, while Japan’s Nikkei rose 4.61 percent. The reason for this was the reduction in geopolitical risks and March’s macroeconomic data being better than expected. In Europe, UK’s FTSE, Germany’s DAX and France’s CAC 40 rose 2 per cent during this session. Overnight, the Nasdaq rose 4 percent, while the S&P 500 rose 3 percent. The reason for this was the hope of ending the US-Iran conflict.
Fall in dollar and bond yields
The US dollar index fell nearly 0.50 per cent, while the US 10-year bond yield fell almost 1 per cent to 4.27 per cent. The fall in dollar and bond yields is a good thing for emerging markets like India, because it improves the prospects of foreign capital inflow.
Promote ‘value buying’
The Nifty 50 fell 11.3 percent in March, continuing its decline for the fourth consecutive month. This sharp decline in the index has brought valuations closer to their long-term average, resulting in many ‘blue-chip’ stocks being offered at attractive prices. The market environment has improved amid positive signals on the West Asian conflict front. In such a situation, investors seem to be engaged in ‘value buying’ to take advantage of the possible further rise in the market.