There was respite for India’s stock market on February 15 as positive developments infused confidence in investors and drew them back to buying shares.
The benchmark BSE Sensex surged 1,736.21 points, or 3.08 percent, to 58,142.05, while the Nifty 50 jumped 509.65 points, or 3.03 percent, to close at 17,352.45.
The gains made up for the loss of the previous day, when stock markets globally spiralled lower on the risk of a Russian invasion of Ukraine, the biggest jump in US consumer prices in 40 years, and high crude oil prices.
Here are factors that cheered the stock market:
1 Russia pulls back forces
Russia’s defence ministry reportedly ordered some troops to return to their bases after training exercises near the Ukrainian border. The build-up of Russian troops at the Ukraine border had escalated geo-political tensions and was a thorn in the health of the global equity markets. News of the troop pull-out defused the tensions and was cheered by most markets including India.
2 Crude oil eases
Brent crude fell 2.4 percent to $94.13 a barrel on February 15, coming off a seven-year high of $96.78 a barrel a day earlier. The improved geo-political environment is expected to reduce oil prices further.
“Weighing on crude prices is the forecast of higher US production with the rig count already near April 2020 highs,” said Ravindra Rao, head of commodity research at Kotak Securities.
Increased volatility in the equity market is also challenging the upside in crude.
3 Mixed global cues
The Asian markets closed mixed on February 15 after falling the previous day, while the major European markets recovered by about 1 percent on the back of positive news from Russia.
4 All sectors gain
All sectoral indices rallied on the National Stock Exchange, led by short covering and value buying in some segments. Banking stocks gained the most with the Nifty Bank index advancing 3.42 percent. The auto, media, IT and realty indices on the NSE each gained more than 3 percent.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, fell 10.4 percent to 20.57 from 22.98. The VIX had increased by about 23 percent on February 14.
5 US stock futures surge higher
US stock futures surged after news of the Russian troop withdrawal. Futures tied to the Dow Jones Industrial Average jumped 309 points, or 0.89 percent. S&P 500 futures climbed 1.18 percent and Nasdaq 100 futures advanced 1.6 percent.
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