Sensex jumps over 1,000 points today: What's the reason?
What's the story
India's benchmark equity indices, Sensex and Nifty, witnessed a strong rally today. The surge was largely driven by gains in broader Asian markets and easing geopolitical tensions. At around 9:30am, the Sensex soared over 1,000 points or 1.4% to trade at 73,762.43, while the Nifty climbed over 300 points or 1.46% to reach 22,842.40.
Market drivers
Value buying drives market rally
The market rally is also being driven by value buying, with domestic markets mirroring gains in broader Asian peers. The Nifty 50 fell 2.5% on Monday and has fallen 10.6% since the US-Israeli war on Iran broke out in late February, amid surging oil prices that have raised inflation concerns and clouded India's growth outlook.
Currency impact
Rupee strengthens as oil prices fall
The Indian rupee strengthened at the open today, aided by a fall in oil prices after US President Donald Trump hinted at talks about a resolution with Iran. The rupee opened at 93.64 against the US dollar, after closing at 93.9750 in the last session where it hit an all-time low of 93.98.
Investor sentiment
Volatility index falls over 4%
The volatility index, which measures market expectations of near-term volatility, fell over 4% to the 25.60 level. This is its highest since early June 2024 and indicates lowered uncertainty among investors. Hariprasad K from Livelong Wealth told Reuters that while the markets are reacting to optimism, underlying geopolitical uncertainty has not fully dissipated yet.