Sensex Jumps 650 Points as Nifty Crosses 25,300
The stock market surged for 3 reasons: Sensex Soars 650 Points, Nifty Tops 25,300: Indian stock markets witnessed a strong rally on Wednesday, January 28. The Sensex surged by more than 650 points in early trading, while the Nifty rose above 25,300. This marks the second consecutive day of gains for the markets. Investor confidence was boosted by the free trade deal with the European Union and positive cues from global markets. Oil and gas, capital goods, banking, power, and commodity stocks saw the biggest gains.
Around 10 AM, the BSE Sensex was trading at 82,503.97, up 646.49 points. The Nifty, meanwhile, surged 196.70 points to reach 25,372.10.
Three major factors contributed to today’s rally in the stock market:
1) Trade Deal Between India and the European Union: The signing of the Free Trade Agreement (FTA) between India and the European Union has boosted investor confidence. It is being called the “mother of all deals.” Under this agreement, taxes will be reduced on approximately 99% of Indian exports to Europe, while duties will be lowered on more than 97% of European exports to India. This deal will encompass roughly a quarter of global GDP and create a market of approximately 2 billion people.
2) Strong Signals from Global Markets: Asian markets, including South Korea’s KOSPI, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng Index, were trading in positive territory on Wednesday morning. Earlier, US stock markets also closed mostly higher on Tuesday night. This further boosted Indian markets today.
3) Decline in India VIX: The India Volatility Index (India VIX), which indicates the level of fear among stock market investors, fell by more than 2% to 14.13 on Wednesday. A decline in the VIX means that market volatility has decreased and investor confidence has increased.
