Why Did Market Rise Today? Key Reasons Behind Sensex Rising 1,046 Points, Nifty Above 25,000

Sensex Soars 1,046 Points! Nifty Breaks 25,000 Amidst Geopolitical Uncertainty

Despite escalating tensions between Israel and Iran, Indian stock markets defied expectations on Friday, June 20th, with the Sensex and Nifty 50 posting impressive intraday gains.

The Sensex, opening slightly below its previous close at 81,354.85, rallied over 800 points (a 1% surge) to reach an intraday high of 82,186.37. Similarly, the Nifty 50 climbed 1%, hitting an intraday peak of 25,040.45 after starting at 24,787.65. This upward trajectory occurred even as Asian markets displayed subdued performance following reports of escalating conflict in the Middle East.

Top Performers and Laggards:

• Gainers: Bajaj Finserv, Mahindra & Mahindra, UltraTech Cement, SBI, Eternal, Maruti Suzuki, and Axis Bank all saw increases up to 1.5%.
• Laggards: IndusInd Bank, Bajaj Finance, Tech Mahindra, and Titan opened in negative territory.

What Fueled the Rally?

Several factors contributed to this unexpected market rebound:

• Market Rebound After Weakness: Following three days of subdued trading, investors capitalized on attractive stock valuations, driven by strong underlying economic fundamentals.
• Falling Crude Oil Prices: A significant drop in crude oil prices (Brent crude fell over 2% to near $77 per barrel) eased inflationary and fiscal concerns. While Middle East tensions remain, profit-booking and uncertainty regarding US intervention seem to be major contributors to this decline. Analysts view oil prices staying below $80 as positive for Indian equities.
• FPIs Resume Buying: Foreign portfolio investors (FPIs) have shown renewed interest in Indian equities for three consecutive sessions, fueled by a decline in the dollar index. On June 19th alone, FPIs invested ₹934.62 crore in the cash segment.
• Technical Factors: Experts suggest the market is within a range, and a decisive breakout will determine its future direction. A successful break above 24,900 on the Nifty could lead to further gains, according to Shrikant Chouhan, head of equity research at Kotak Securities.

Expert Opinions & Investor Strategies:

Shrikant Chouhan of Kotak Securities advises a long trade if Nifty crosses 25,000, with a stop loss at 24,800. Conversely, he anticipates further weakness below 24,700, recommending a stop loss at 24,900 in that scenario.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, believes Nifty will likely remain within the 24,500-25,000 range in the short term, with a potential upward break contingent on de-escalation of the Israel-Iran conflict. He notes that strong domestic institutional buying is likely to prevent a significant downward break.

Overall market capitalization of BSE-listed companies increased by nearly Rs 3 lakh crore, reaching Rs 446 lakh crore.