Sensex jumps 2,800 points as US-Iran agree to ceasefire
What's the story
The Indian stock market is witnessing a major surge today, with the Sensex and Nifty 50 indices jumping nearly 4% each. The Sensex hit an intraday high of 77,392 after gaining nearly 2,800 points or almost 4%. Meanwhile, the Nifty 50 climbed over 800 points or some 3.5%, hitting a day's high of 23,939. The mid and small-cap segments also witnessed gains of up to 4%.
Market capitalization
Investors' wealth up by ₹14 lakh crore
The overall market capitalization of BSE-listed firms jumped to ₹443 lakh crore from ₹429 lakh crore in the previous session. This massive jump has added a whopping ₹14 lakh crore to investors' wealth within minutes. The volatility index India VIX also fell by over 19%, going below the 20 mark in early deals, indicating a reduction in market nervousness.
Market drivers
US-Iran ceasefire, fall in crude oil prices major factors
The Indian stock market's rise today can be attributed to a few key factors. First, US President Donald Trump announced a two-week ceasefire with Iran, which has been accepted by Tehran. Talks between the two countries will begin in Islamabad on Friday. Second, Brent Crude prices fell 14% to below $95 per barrel, raising hopes of uninterrupted crude oil supply through the Strait of Hormuz.
Currency impact
Rupee appreciates by over 50 paise
The dollar index fell by over 1% to 98.84 amid falling crude oil prices and easing geopolitical tensions. The Indian rupee also gained in early deals on Wednesday, further boosting domestic market sentiment. According to PTI, the rupee appreciated by 50 paise to 92.56 against the US dollar in early trade on Wednesday after the US and Iran agreed to a two-week ceasefire.
Global influence
Positive global cues boost sentiment
Positive global cues also impacted domestic market sentiment. Major Asian markets, including Korea's Kospi and Japan's Nikkei, jumped up to 6% after the US-Iran ceasefire announcement. Strategists believe this development brings welcome relief to Asian markets despite potential volatility due to unclear details of the agreement and concerns over the Strait of Hormuz. The market is also focused on whether RBI MPC will keep repo rates unchanged at 5.25%.