Indian stock market witnessed a strong rally after six weeks, here are the five main reasons

After a long period of decline, today the Indian stock market has given great relief to the investors. The Sensex once again crossed the 80,000 mark, while the Nifty also reached above 24,550. This boom in the market has surprised everyone, but there are some solid reasons behind it which are related to global and domestic factors. Let us know what were the reasons behind today’s boom.

Investors buying at cheap prices

In the last six weeks, the market saw a continuous decline, due to which the prices of many stocks came down significantly. In such a situation, investors considered it a good opportunity and bought heavily. The market was earlier under pressure due to issues like US tariffs, but now there is a race to buy stocks at cheap prices, which became a major reason for the boom.

Positive trend of international markets

There was a good rally in the Asian markets today, although the Japanese market remained closed due to holiday. But the futures there reached 42,465 points, raising hopes that it could touch a record high of 42,426 points. In the US too, Wall Street futures rose, especially the Nasdaq rose 1 per cent. This is the second consecutive day when the Nasdaq showed strength, which is also affecting the Indian market.

Strong performance of stocks like SBI and Grasim

Good quarterly results of some big companies supported the market. Shares of State Bank of India (SBI) rose 2.2 per cent as its annual net profit increased by 12.5 per cent. Similarly, shares of Grasim also rose 2.2 per cent, although some brokerage houses like Jefferies and Morgan Stanley have cut its target price. The rise in these big stocks pulled the entire market up.

Crude oil prices fall

Oil prices saw a decline today, which was positive for the market. Brent crude futures fell 0.5 per cent to $66.26 a barrel, while US West Texas also fell 39 cents. Oil prices fell more than 4 per cent last week, reducing inflation pressure and boosting investor confidence.

Record investment in mutual funds

Recent data from the Association of Mutual Funds in India (AMFI) showed that equity mutual funds grew 81 per cent in July, reaching Rs 42,672 crore. This strong data indicates an inflow of new money into the market, which is further strengthening today’s rally.

Market experts believe that these factors together can give a new direction to the stock market, but volatility may persist.

Note: This is not an investment advice. The stock market involves risk, so consult experts before taking any decision.