The Indian stock market benchmarks- the Sensex and the Nifty 50- jumped higher by more than 1% each on Wednesday, 6 May, amid reports that the US and Iran were nearing a deal to end their conflict.
The jumped more than 1,000 points, or over 1%, to an intraday high of 78,022.78, while the Nifty 50 touched the day’s high of 24,356.50 during the session.
Paring some gains, the 30-share pack ended at 77,958.52, up 941 points, or 1.22%, while the Nifty 50 settled at 24,330.95, rising 298 points, or 1.24%.
The broad-based buying interest lifted the mid and small-cap segments also. The BSE 150 Midcap index jumped 1.67%, while the BSE 250 Smallcap index surged 1.77%.
InterGlobe Aviation (IndiGo), Tata Motors Passenger Vehicles, and Shriram Finance were the top gainers in the Nifty 50 index, which saw 35 of its components ending in the green.
However, ONGC, Reliance Industries, and Power Grid Corporation of India ended as the top losers in the Nifty 50 index.
Investors earned about ₹6 lakh crore as the overall market capitalisation of BSE-listed firms jumped to ₹473 lakh crore from below ₹467 lakh crore in the previous session.
Why did the stock market rise?
Let’s take a look at key factors behind the rise in the stock market:
1. US-Iran nearing a deal?
According to reports, the US and Iran are close to ending their conflict, which has driven energy prices sharply higher, rattling investor sentiment globally and fuelling concerns about its impact on global growth and the inflation trajectory.
As per news agency Reuters, Axios reported that the US believes it is “getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations.”
Earlier, President signalled there was “great progress” towards ending the conflict.
2. Crude oil prices fall
Brent Crude prices crashed 6% to trade near $103 per barrel amid news flows suggesting the Middle East conflict was near its end, which may lead to the reopening of the , a critical waterway for energy supplies through which almost 20% of global energy supply takes place.
3. Massive short covering across sectors
The market rallied amid short covering across the segment, driven by a fall in crude oil prices and easing geopolitical concerns.
Bank, auto, financial, pharma, and realty indices jumped more than 2% each, while metal, IT, and consumer durables rose by 1%.
4. Rupee rises
The Indian rupee climbed 0.7% to its one-week high of 94.5975 per dollar in intraday trade on Wednesday amid falling crude oil prices and improving sentiment.
More to come…
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