Despite a decline in the first trading session of the week, the stock market bounced back in the second trading session. This will certainly boost investor confidence during these volatile times. On Tuesday, the Sensex rose 640 points or 0.82 per cent. Following this increase, BSE's benchmark index stands at 78,205 points. Nifty50 gained 0.97 per cent or 233 points on the day. As a result, NSE's benchmark index stands at 24,261 points. Due to this growth, market capitalisation increased by 6 lakh crore rupees.
Along with Sensex and Nifty50, small-cap and mid-cap indices also performed well. The small-cap index on BSE rose more than 2 per cent. The small-cap index increased by 1.66 per cent. All sectoral indices are in positive territory except IT and oil & gas.
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Why the market surge?
Hope for end of US-Iran war
At the end of February, America and Israel jointly launched attacks on Iran. The conflict is now in its second week. However, market sentiment suggests the war might end quickly. US President Donald Trump has also said that Iran's air force and navy have suffered major damage. Therefore, the war could end before the previously anticipated four-week timeframe.
Decline in crude oil prices
After Trump's indication, crude oil prices began falling rapidly. He also mentioned lifting some oil-related sanctions and providing US naval security to oil tankers through the Strait of Hormuz.
Recovery of the rupee
The rupee has also regained some strength. On Tuesday, the rupee strengthened by 53 paise against the dollar to 91.8050. The previous day it had fallen to a record low of 92.3575.
Value buying across various sectors
Following the recent decline, value buying is seen in good shares. As a result, the Nifty Auto index rose more than 3 per cent. The PSU Bank index also climbed more than 2 per cent. Bank, financial services and pharma shares also saw gains. However, the IT index declined slightly.
