Sensex, Nifty up 4% in 7 days: Know driving factors
This year hasn't been the best for India's equity market. The last seven days, however, have been different. The Sensex and Nifty have put up stellar numbers over the past week. While Sensex is past its psychological mark of 60,150, the Nifty is above the 17,700 mark. Investors have had a great time due to the rally. Let's see what led to this.
Why does this story matter?
The first three months of this year have been nothing short of disastrous for the stock market. Several factors, including the Adani-Hindenburg row, inflation, rate hikes, and banking crisis, were behind the constant routs. From January-March, Indian stocks lost 11% in market capitalization, most among the world's top markets. Is the current rally a sign of change? We will have to wait and watch.
The market has been on winning streak since March 29
In the last seven trading sessions, the Sensex has gained 2,544 points or 4.41%, while the Nifty has moved up by nearly 771 points or 4.55%. The market has been on a winning streak since March 29. It's been a while since the Indian market strung together these many winning days. The streak has resulted in a massive jump in market capitalization.
Market capitalization skyrocketed by over Rs. 12.5 lakh crore
On March 28, the market capitalization of BSE-listed companies was about Rs. 251.94 lakh crore. On April 11, after the trading session ended, the market capitalization of BSE-listed firms stood at Rs. 264.51 lakh crore. In the last seven days, market capitalization has zoomed by over Rs. 12.5 lakh crore. From April 10 to April 11, capitalization rose by over Rs. 1 lakh crore.
Banking and metal stocks kept the winning streak alive today
Today, the Sensex and Nifty had a bearish opening but the indices witnessed a surge. Sensex jumped 0.52% to 60,157.72 points while Nifty climbed 0.55% to 17,722.3 points. The top-gaining stocks were Kotak Mahindra, JSW Steel, and Eicher Motors, adding 4.99%, 3.7%, and 2.91%, respectively.
Pause in interest rate hikes was a gamechanger
The upshift in the fortune of Indian equities can be attributed to positive auto sales data, a three-month high manufacturing PMI, strong financial stocks, and a cut in windfall tax, among others. However, the Reserve Bank of India's (RBI) decision to pause interest rate hikes tilted the fortune in the market's favor. This decision uplifted Dalal Street from its misery.
