Stock market today: Indian stock market benchmarks — the Sensex and the Nifty 50 — jumped more than 1% each in intraday trade on Thursday, 14 May, despite the rupee’s fall to a record low, higher crude oil prices, and lingering uncertainty over the US-Iran conflict.
The Sensex soared over 1,000 points, or 1.4%, to an intraday high of 75,653, while the NSE barometer Nifty 50 jumped 1.5% to the day’s high of 23,760.
Why is the stock market rising?
The rise in the benchmark indices is largely driven by value buying after the recent correction, which brought both indices down by 4%.
The oversold market is witnessing a relief rally amid speculation that US President and his Chinese counterpart, Xi Jinping, will likely discuss the Middle East conflict during Trump’s ongoing visit to Beijing. Despite geopolitical and strategic complexities, the China-US talks could act as a tailwind toward an amicable resolution to the Middle East conflict.
“I see this more as a relief rebound because the market had corrected significantly over the last four to five sessions. Even today’s rise is just about 1% in percentage terms. There could be some short covering, especially from traders who carried short positions yesterday and are now reducing exposure after yesterday’s highs were taken out,” said Ajit Mishra, SVP of Research at Religare Broking.
The market is currently being driven by a sector-specific approach rather than broad-based buying. It is not as though all sectors are moving in a negative direction simultaneously, and that is also contributing to the recovery.
“There is optimism around certain sectors that had already been showing strength earlier. Metals, for instance, have been holding up quite well. We are also seeing support from some heavyweight stocks across sectors on a rotational basis,” said Mishra.
“I would classify this as a rebound unless the Nifty reclaims the 24,000 mark decisively. Without that, I do not think we can call this a meaningful or sustainable recovery in the markets,” he added.
Headwinds galore
There is no dearth of headwinds for the market. Rupee’s weakness and massive foreign capital outflow amid higher crude oil prices are major concerns for the Indian market.
Crude oil benchmark Brent Crude traded above $105 per barrel, while the fell 0.1% to a fresh record low of 95.85 against the dollar on Thursday.
The domestic currency has declined nearly 7% this year so far and is among the worst-performing Asian currencies this year.
A Mint poll of 10 banks, brokerages and economists showed the domestic currency may weaken further through the year, with most forecasts for end-2026 clustering in the 96-98 per dollar range. Some even go so far as to say the currency will fall to 100 per dollar.
“Continuous rupee depreciation is becoming a major macro threat for the economy. If crude remains elevated for an extended period, the rupee will move to 100. The other major drag on the rupee is the sustained selling by FPIs in the Indian market,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
“Money is moving into markets like the US, Japan, South Korea and Taiwan, which are doing very well. So long as the outperformance of these markets and the underperformance of India continue, FPIs will continue to sell, which, in turn, will further drag the rupee down,” said Vijayakumar.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. 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.