Wednesday saw a strong recovery in equity indexes, with late-session buying in financial companies helping the Sensex rise more than 300 points and the Nifty close above 23,400. The volatile session saw the Sensex rise 309.40 points to close at a two-week high of 77,044.29. On its way to 23,437.20, the NSE Nifty gained 108.65 points.
The past hour saw both indices gain strength after spending the majority of the day in a confined zone, driven primarily by heavyweight and banking stock purchases. The Nifty closed close to the day’s high after breaking through the 23,400 resistance level, indicating upward momentum.
These are the main causes of the market’s rebound.
1) Financials lead the charge: The Nifty Bank index rose for the third consecutive day as a result of strong purchasing in banking companies. Financial equities were boosted by analysts’ predictions that the Reserve Bank of India (RBI) would lower interest rates due to softer inflation statistics.
2) FII inflows: Tuesday’s net purchases by foreign institutional investors totaled Rs 6,065 crore, the largest amount they have made in a single day since March 27, when they invested Rs 11,111.25 crore.
3) Normal monsoon prognosis adds cheer: The India Meteorological Department’s prediction of above-normal rainfall for the forthcoming southwest monsoon further improved the mood, particularly for enterprises with an emphasis on agriculture, rural demand, and fast-moving consumer goods.
4) Rising rupee: On Wednesday, the rupee remained stable and gained 26 paise to 85.54 against the US dollar due to a significant influx of foreign investment, a depreciating US dollar, and a decline in the price of crude oil. According to the forex dealers cited by PTI, the local currency gained strength as a result of foreign investors’ purchases of domestic stocks fueled by the favorable macroeconomic data that followed the 90-day reprieve from US reciprocal tariffs.
5) Domestic retail inflation hits a five-year low: The price of vegetables, eggs, and other protein-rich goods dropped somewhat in March, bringing retail inflation down to a nearly six-year low of 3.34 percent. This increased expectations of a third RBI rate cut.
