Share Market: On Wednesday, once again the bulls made a comeback in the Indian stock markets. Sensex and Nifty rose over 1.8 per cent. Just before the important meeting of the Federal Reserve Policy, the effect of the positive trend in the global markets was also visible on the Indian stock markets.
On Wednesday, the 30-share Bombay Stock Exchange (BSE) Sensex rose 808.69 points, or 1.86 per cent, to end at 56,816.65. At the same time, the 50-share National Stock Exchange (NSE) Nifty closed at 16,975.35 with a gain of 233.20 points or 1.87 per cent. During this, buying was also seen at the lower level in those stocks in the market, which had fallen heavily in the last few days. Even this strengthened the rally on Wednesday.
There were four important reasons behind the jump in the stock market on Wednesday. Let us know them one by one-
1. Positive trend in global markets
There was a strong jump in Asian stock markets on Wednesday. Particularly in China’s Shanghai Composite and Hong Kong’s Heng Seng, where there was a huge jump of 3.5 per cent and 9 per cent, respectively, on Wednesday after a sharp fall in the trading session a day earlier. Shares of Tencent and Alibaba were in the grip of bears in the last trading session, but on Wednesday, these shares led the rally. Apart from this, Japan’s Nikkei, Australia’s ASX 200 and South Korea’s Kospi saw gains of 1-1 per cent.
In a report published in a Chinese state media on Wednesday, there were signs of support for the shares of Chinese companies. The report said that the regulators of America and China are working on a cooperation plan. This plan is being made keeping in mind the Chinese companies listed in America. Due to this, the markets of China and Hong Kong also saw a rise on Wednesday.
Apart from this, sentiment in Asian markets strengthened due to the rise in US stock markets. On Tuesday, the US S&P 500, Dow Jones and Nasdaq Composite closed with gains of 2 to 3 per cent.
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2. Federal Reserve Meeting
Investors around the world are waiting for the decision of the US Federal Reserve to raise interest rates. The meeting of the US Federal Reserve is to be held on Wednesday night. More experts estimate that the Federal Reserve may increase interest rates by 0.25 per cent, compared to the earlier forecast of 0.50 per cent hike. This will be the first time since 2018 that the Federal Reserve will raise interest rates.
Experts will also be watching what the Federal Reserve has to say about raising interest rates in the future as inflation in the US is currently at its 40-year high.
3. India Volatility Index
There has been a significant reduction in volatility, which has resulted in increased stability in the market. Experts believe that if the volatility further dips below the 20 level, it can act as a support level for the bulls.
India VIX, an index that measures volatility in the market, fell 9.77 per cent to 24.12 on Wednesday. When Russia launched its invasion of Ukraine on 24 February, it was at 34 at the time. Since then it has declined significantly.
4. All sectors in the green mark
The rally in the market got support from all the sectors. The metal index saw the biggest jump of around 3 per cent, while it had fallen by 4 per cent in the previous trading session. Nifty Bank, Auto and Financial Services also rose up to 1.8 per cent, while IT and FMCG sector indices rose up to around 1 per cent.
There was a lot of buying in small and medium stocks on Wednesday. While the Nifty Midcap 100 gained 2 per cent, the Nifty Smallcap 100 closed with a gain of 1.17 per cent.
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