Before the election results of five states, on March 9, the Indian stock market was bullish for the second consecutive day. Market sentiment was buoyed by news of Ukrainian President Volodymyr Zelensky not insisting on NATO membership. Analysts expect the US Fed’s stance to be less rigid, which will help the markets recover.
After trading in the green throughout the day, the Sensex gained 1,223 points or 2.30 per cent to end at 54,647, while the Nifty improved 332 points to close at 16,345.
Here we are telling some of the main reasons for the rise in the market…
election results
Election results: Investors are waiting for the results of the upcoming elections tomorrow i.e. on March 10. The India Today-Axis My India exit poll has predicted victory for the BJP in Uttar Pradesh and the Aam Aadmi Party in Punjab. Whereas in the exit polls, the BJP has been given a majority in Manipur, an edge in Uttarakhand, while in Goa there is a possibility of a tough fight with the Congress.
Reduction in Russia-Ukraine conflict
Russia-Ukraine conflict: There have been reports of Ukrainian President Volodymyr Zelensky not insisting on NATO membership. Russia had declared war on this issue. At the same time, Zelensky also said that he was ready to “compromise” on the status of the pro-Russian territories.
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government policies
According to a Morgan Stanley report, equity markets are not falling as much as expected due to the Ukraine crisis and rising oil prices. Morgan Stanley argued, “The policy landscape in India is one of the strongest in the world, driving India’s growth story. At the same time, a new profit cycle is being prepared here. Oil prices are a challenge, but not much of a problem given the policy scenario.”
Despite continuous selling by FPIs since October 2021, the market has not fallen that much. Since 2014, external funding has shifted dramatically to FDI, which is more stable and less sensitive to oil price fluctuations.
Analysts are cautious and await the steps taken by RBI to tackle inflation in the next policy meet. RBI had earlier estimated that a 10 per cent hike in Brent crude prices would put downward pressure on real GDP growth by 15 bps. Analysts believe that due to weak GDP growth, the RBI may have to postpone the first hike in the repo rate for the second half of the financial year (possibly October).
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GST Collection
GST Collection: India’s GST collection grew by 18 per cent to Rs 1.33 lakh crore in February. This is the fifth consecutive month that the GST has crossed Rs 1 lakh crore.
Powell’s statement
Federal Reserve Chairman Jerome Powell said that amid the ongoing war in Ukraine, the central bank will raise the interest rate cautiously in its Mart meeting.
LIC IPO
LIC IPO: According to some media reports, LIC IPO can be postponed to the next financial year. Analysts speculate that the government may have to come out with an IPO at a discount price due to the fall in the markets. He said that postponing the LIC IPO for the next financial year is good news and will help in keeping the fiscal deficit low next year.
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