The stock market witnessed a tremendous rise on Thursday i.e. today. Sensex and Nifty rose by about 2 percent. Sensex rose by 1500 points, while Nifty jumped by 500 points. However, by the time the market closed, Sensex closed at 82,962.71, up 1,439.55 points, while Nifty closed at 25,388.90, up 470.45 points. Now two big questions are arising in the minds of investors and traders that what was the reason for such a big rise today and what will happen next?
Why did the stock market rise sharply?
The stock market kept moving at a slow pace throughout the day, but after noon there was a sudden rise and tremendous buying was seen. After which the stock market hit an all-time high level. All the stocks of Nifty 50 and BSE Sensex saw a good rise. This rise was influenced by other European and Asian markets. Because it has been estimated that the chances of a 25 basis point cut in the Fed rate have increased. The Fed policy meeting is scheduled to be held next week on 17-18 September.
In addition, reports that China is considering cutting interest rates on more than $5 trillion of outstanding mortgages as early as this month, with the ECB’s policy meeting scheduled for later the same day, have raised expectations of policy easing globally, leading to an increase in risk appetite. These news are being well received by traders and investors at the global level. Due to which the stock market has seen a rise.
What should investors do?
The rally in large cap stocks was led by Reliance Industries Limited (RIL), Bharti Airtel Limited, HDFC Bank Ltd and Infosys Limited. These four stocks alone contributed nearly 500 points to the rise in the Sensex. Experts said that investors should focus more on large cap stocks. They can also bet more on midcaps.
How will the stock market move in the future?
Vinay Pahadia, CIO of PGIM India Mutual Fund, said that the market scenario is changing. Now it has once again turned in favor of high growth and high quality companies. This is driven by expectations of a soft interest rate environment. Income expectations for high growth and high quality companies remain strong. It is expected that rate cuts in the coming days can take the market further up.
Rupak Dey, Senior Technical Analyst at LKP Securities, said that Nifty has broken its recent consolidation on the daily chart, which indicates an increase. He said that RSI on the daily chart shows a bullish crossover, which strengthens the positive sentiment. If we look at the upward rally, then Nifty can go up to the 25,470-25,500 range. While support is formed at 25,100.
Slight increase in inflation rate
There has been a slight increase in India’s retail inflation, which has come down to the lowest rate for the second time in five years. In such a situation, experts predict that the market and investors will take this thing positively and the market may see a rise on Friday as well.
(Note- Before investing in any stock, please consult your market experts.)
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