The US-Iran ceasefire announcement sparked strong buying in the Indian stock market on Wednesday, April 8.(An AI-generated image. )AI Quick ReadThe Indian stock market witnessed strong buying interest on Wednesday (April 8) morning, with the benchmark indices- the Sensex and the Nifty 50- vaulting almost 4%.
The Sensex jumped nearly 2,800 points, or almost 4%, to an intraday high of 77,392, while the NSE counterpart Nifty 50 jumped over 800 points, or 3.5%, to the day's high of 23,939.
The rally was broad-based as the mid and small-cap segments also jumped by 3%.
The volatility index India VIX plunged by more than 19% to fall below the 20 level in early deals, reflecting easing market nervousness.
The overall market capitalisation of BSE-listed firms jumped to ₹443 lakh crore from ₹429 lakh crore in the previous session, making investors richer by ₹14 lakh crore within minutes.
Here are five key factors behind the rise in the Indian stock market:
US President Donald Trump announced Washington will suspend military actions against Iran for two weeks. Iran has also accepted the ceasefire plan.
Moreover, talks between the US and Iran will begin in Islamabad on Friday. The market is cheering the prospects of a final announcement about the end of the West Asian war in the coming few days.
Brent Crude prices crashed 14% to drop below $95 a barrel, infusing positive sentiment into the stock market, as hopes prevailed that uninterrupted crude oil supply through the Strait of Hormuz could resume soon.
A crash in crude oil prices is a major relief for the Indian economy and stock market. A sustained fall in crude oil prices can improve the Indian economy's growth outlook, support the currency, and may brighten the prospects of foreign capital inflows.
The dollar index declined by more than 1% to 98.84 amid a crash in crude oil prices and easing geopolitical tensions.
Meanwhile, the Indian rupee gained further in early deals on Wednesday, influencing domestic market sentiment. As per PTI, the rupee surged 50 paise to 92.56 against the US dollar in early trade on Wednesday after the US and Iran agreed to a two-week ceasefire.
A weaker dollar and stronger rupee can nudge foreign portfolio investors to change their stance on Indian equities.
Positive global cues also influenced domestic market sentiment. After the US-Iran ceasefire announcement, major Asian markets, including Korea's Kospi and Japan's Nikkei, jumped up to 6%.
According to Bloomberg, strategists believe the ceasefire between the US and Iran brings welcome relief to Asian markets even as volatility may continue due to the lack of clear details on the agreement and concerns over the Strait of Hormuz.
The market expects the Monetary Policy Committee (MPC) to keep repo rates unchanged at 5.25%, and maintain policy stance at ‘Neutral’. Amid positive developments on the West Asian war front, the market expects the Reserve Bank of India (RBI) not to change the growth and inflation forecasts materially.
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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.
Nishant is a market reporter at Mint, where he holds the official designation of Principal Correspondent – Markets. He has been closely tracking the Indian stock market as well as major global stock markets along with the broader macroeconomic trends for a decade.
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He is obsessed with breaking down complex financial and economic concepts into clear and engaging stories. He focuses not only on what is happening in the markets, but also why it matters.
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His coverage includes stock market trends, sector rotations, monetary and fiscal policy developments, inflation, growth data, and personal finance strategies.
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With nearly 10 years of experience in covering financial markets, Nishant has covered bull markets, corrections, policy transitions, and macro developments that has equipped him with a deep understanding of how domestic and global forces shape markets and affect investments.
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He regularly interviews market veterans, fund managers, economists, policymakers, and corporate leaders to provide readers with a 360-degree view of market dynamics and the broader economic landscape.
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Before joining Mint, Nishant worked with some of India’s most respected business newsrooms, including The Economic Times and Moneycontrol, where he reported extensively on the stock market, corporate earnings, macroeconomic trends, GDP, inflation, monetary policies of the RBI and the US Federal Reserve, bonds, and currencies.
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Apart from economics and investing, he has interests in geopolitics and emerging technologies, such as AI.