Trump's ceasefire sparked a wave of money, earning stock market investors ₹14 lakh crore
Following the announcement of a two-week ceasefire between Iran, Israel, and the United States, the Indian stock market rallied. The Sensex and Nifty, the key indexes, rocketed to market highs on Wednesday. The Sensex and Nifty 50 rose by approximately 3.5 percent.
US President Donald Trump's statements have completely changed the course of not only the Indian stock market but also markets worldwide over the past few months.
Or, to say, drastically changed it wouldn't be an exaggeration. However, after a while, Trump became so unruly that even the market began ignoring him. The situation became so dire that the market stopped reacting to Trump's statements.
This has been the case for the past four trading days. However, Trump's statement on Tuesday night regarding a two-week ceasefire with Iran gave the markets the boost they had been waiting for.
Following Trump's statement, Asian markets surged by 5% on Wednesday, and the Indian stock market also swelled. The green lines of the Sensex and Nifty flashed on laptop and phone screens.
The market rocketed as soon as it opened. The Sensex and Nifty rose by nearly 3.5% in the opening market. Investors made nearly ₹14 lakh crore in just a few minutes.
Sensex
At the time of writing this news, the market's key index, the Sensex, rose nearly 2600 points to reach 77,160.60.
Meanwhile, the Nifty 50 crossed the 23,800 mark, gaining nearly 3.30 percent. Meanwhile, 29 out of 30 Sensex companies saw gains. Let's explore the main reasons for the stock market rally.
Why is the Indian stock market bullish today?
US-Iran ceasefire - US President Donald Trump announced that the US will halt military action against Iran for two weeks. Iran has also accepted this decision.
Furthermore, talks between the US and Iran will begin in Islamabad on Friday. The market is buoyed by the hope that a complete end to the war in West Asia may be declared in the coming days. In a Mint report, VK Vijayakumar,
chief investment strategist at Geojit Investments, said that the two-week ceasefire between the US and Iran has significantly changed the market sentiment.
The significant drop in Brent crude prices following the ceasefire will boost the market. The expectation of the reopening of the Strait of Hormuz will boost investor confidence and encourage them to invest again.
A sharp drop in crude oil prices – Brent crude oil prices fell nearly 14% to below $95 per barrel, creating a positive market sentiment.
This is due to expectations that oil supplies from the Strait of Hormuz will resume uninterrupted. The drop in crude oil prices is good news for India. It supports the economy, strengthens the rupee, and increases the likelihood of increased foreign investment.
Dollar falls, rupee strengthens - The dollar index fell more than 1% to 98.84 due to falling crude oil prices and easing tensions.
Meanwhile, the rupee strengthened in early trading on Wednesday. According to PTI, the rupee rose 50 paise to 92.56 against the dollar following the ceasefire between the US and Iran.