The Indian stock market witnessed strong buying interest in intraday trade on Monday, 4 May, which drove the benchmarks — the Sensex and the Nifty 50 — higher by over 1% each.
The 30-share pack surged by 1,000 points, or 1.3%, to an intraday high of 77,911, while the NSE barometer rose by 1.2% to the day’s peak of 24,290.
The gains were broad-based as the Nifty Midcap 150 and the Nifty Smallcap 250 also gained more than 1% each.
Investors earned about ₹6 lakh crore in a single session as the overall market capitalisation of BSE-listed firms jumped to ₹469 lakh crore from ₹463 lakh crore in the previous session.
Why is the Indian stock market rising?
Let’s take a look at five key factors behind the rise in the Indian stock market:
1. Assembly Election results trends
According to some experts, the market is reacting to early results trends of the in West Bengal, Tamil Nadu, Kerala, Assam, and Puducherry.
Track
Experts say that the BJP’s victory in Assam, West Bengal, and Puducherry, and an improved performance in Kerala and Tamil Nadu, may bring border stability, thereby fueling business and industrial activities.
“As the market had an idea about the Assam and Puducherry election results, it was mixed on the West Bengal election results. So, if the positive trends continue and BJP’s margin gets further extended against its rival Mamata Banerjee’s Trinamool Congress, there can be a spike in the Indian stock market,” said Sandeep Pandey, Co-founder of Basav Capital.
2. US-Iran peace talk hopes rise
US President Donald Trump on Saturday said he will review Tehran’s new proposal after the West Asian country submitted a to mediator Pakistan. According to Iran’s Tasnim and Fars news agencies, Tehran’s plan includes a proposal to end the conflict on all fronts and to enact a new framework for the Strait of Hormuz waterway.
Meanwhile, on Sunday (local time), Trump said that US representatives are engaged in “very positive” .
3. Crude oil prices stabilise
prices eased and traded below $110 per barrel as reports suggested that Trump said the US would attempt to free up ships stranded in the Strait of Hormuz.
Brent crude futures fell by 0.60%, to $107.53 a barrel, while US West Texas Intermediate fell 0.80% during the session.
“The market trend will be guided by the crude oil prices, which, in turn, will be decided by the news and happenings in West Asia. President Trump’s declaration that the U.S. will help and guide ships through the Strait of Hormuz has brought Brent crude down to around $108 levels. Also, there is a latest proposal from Iran to the US delivered through Pakistan,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
4. Positive global cues
Positive Asian markets also influenced sentiment. Korea’s Kospi jumped by 5% during the session amid positive news flows surrounding the West Asian conflict, while Markets in Japan and China are closed for a holiday.
5. Technical factor
According to ICICI Securities, the major Call base for the weekly expiry is placed at the 24500 levels, which is likely to act as stiff resistance in the short term. On the other hand, the Put base remains at 24000 levels.
“Going ahead, we continue to believe that 23,800 levels should act as major support and only below it, we should expect fresh weakness. On the higher side, 24,500 levels are likely to act as an intermediate hurdle,” said the brokerage firm.
Hitesh Tailor, a research analyst at Choice Equity Broking, said immediate support for the Nifty 50 is placed in the 23,850–23,900 zone, while resistance is seen in the 24,250–24,300 range. RSI hovers around the midpoint, suggesting neutral momentum, while rising volatility reflects a cautious undertone in the market, said Tailor.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.